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DoubleLine Capital Chief Executive Jeffrey Gundlach said on Wednesday that if the Federal Reserve sticks to its path of rate hikes this year, it could tip the economy into recession. “I think if the Fed follows the path they’re talking about, … they’re going to break something,” Gundlach said on CNBC’s “Closing Bell.” The Fed paused rate hikes in June but expects to raise rates to 5.6% by the end of 2023. The so-called dot plot, released on Wednesday, forecasts two more hikes by 2023 if the central bank keeps the pace of rate hikes in one-quarter increments. The prominent fixed-income investor, whose firm manages $92 billion in assets at the end of 2022, said many economic indicators have started to flash red. “There are so many indicators in recessionary territory,” Gundlach said, referring to weak readings in the ISM’s new orders and purchasing managers’ index. “I’m having a hard time finding a strong indicator.” Gundlach said he didn’t think the Fed would raise rates again because the data was expected to deteriorate. “I think Jay Powell has a very difficult job right now,” Gundlach said. “I think he realizes that we’re at a potential inflection point, both in terms of the inflation situation and in terms of the economy … I think the Fed is exaggerating the inflation risk at this point.” Fed Chairman Jerome Powell said the committee’s next meeting in July The meeting will still be a “live” meeting, suggesting that a 25 basis point rate hike has yet to be confirmed. There are four more policy meetings in 2023. “We didn’t make a decision about July. … Of course it comes up in meetings from time to time, but the real focus is on what to do today,” Powell told a news conference Wednesday. “I would say … two things: one, no decision has been made. Two, I do expect it will be a live meeting.”