Jeff Gundlach questioned the point of taxes if 'endless' central bank borrowing is a 'viable solution,' in a stinging attack on the Fed

• Billionaire bond investor Jeff Gundlach on Monday night criticized the Federal Reserve's announcement that it will borrow nearly $3 trillion in the next quarter, questioning the purpose of taxation if "endless" borrowing is viable.
• "If endless borrowing is a viable solution, why did we have any taxation in the first place?"— he asked.
• He also appeared to suggest that borrowing would be significantly higher, saying he'd "take the over" on that figure.
• The Fed has launched an unprecedented stimulus package in recent weeks aimed at insulating the US economy from the coronavirus' impact.
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Billionaire bond investor Jeff Gundlach on Monday night criticized the Federal Reserve's announcement that it will borrow nearly $3 trillion in the next quarter, questioning the purpose of taxation if "endless" borrowing is viable.

Gundlach, the founder of DoubleLine Capital tweeted on Tuesday:

"The U.S. Treasury Department today admitted to a $3 Trillion "borrowing" need in the next quarter. (I'll take the "over".) If endless borrowing is a viable solution, why did we have any taxation in the first place?"

The Fed has ramped up borrowing sharply in recent weeks as it fights to insulate the US economy from the fallout of the coronavirus and the subsequent nationwide lockdown, which has crippled small and big businesses, and American taxpayers.

On Monday, announced that it "expects to borrow $2,999 billion in privately-held net marketable debt, assuming an end-of-June cash balance of $800 billion."

Gundlach, often known as the "bond king," however questioned the Fed's announcement, appearing to suggest that such levels of borrowing are unsustainable.

He also appeared to suggest that borrowing would be significantly higher, saying he'd "take the over" on that figure.

Read more: A stock chief at $6.5 trillion BlackRock outlines 5 major themes the pandemic is poised to shape — and why investors should take note of each

The Fed added: "The increase in privately-held net marketable borrowing is primarily driven by the impact of the COVID-19 outbreak, including expenditures from new legislation to assist individuals and businesses, changes to tax receipts including the deferral of individual and business taxes from April – June until July, and an increase in the assumed end-of-June Treasury cash balance."

The Fed's latest announcement that it expects to borrow $3 trillion over the next quarter comes after a spate of stimulus measures it has taken in recent weeks to cushion the impact of coronavirus.

It it announced a $2.3 trillion package on April 9 to bolster lending and begin buying corporate debt across a range of credit ratings.

The Fed said it would begin buying corporate bonds for the first time in its 107-year history, offering aid for cash-strapped businesses large and small.

Read more: Renowned strategist Tom Lee recommends 12 beaten-down travel stocks to buy now for an average profit of 32% during the pandemic recovery.

In mid-March it announced plans to inject $5 trillion into stressed markets, and reduced interest rates close to zero.

Gundlach has become the latest voice in the industry to question the policies the Fed is pursuing to deal with coronavirus.

Famed economist Mohamed El-Erian warned on Monday the Fed supporting junk bonds could eat away at 'what makes America special," and create a new generation of "zombie companies."