DoubleLine Capital CEO Jeffrey Gundlach believes the Federal Reserve is missing the bigger picture again.

“The Fed looks like Mr. Magoo, driving around, bumping into things. Then became systematic, got inflation to come down,” Gundlach said in an investor webcast Tuesday evening. “But for the past five months we’ve had another rising trend. This has got the Fed back into short-termism, reacting too much to short-term data, not being strategic.”

Gundlach, a noted fixed-income investor whose firm manages $95 billion, made the comments before the latest reading of the consumer price index on Wednesday. The CPI increased a seasonally adjusted 0.4% on the month, putting the 12-month inflation rate at 2.9%

Excluding food and energy, the core CPI rate came in slightly lighter than expected both on a monthly basis and an annual basis. While the numbers compared favorably to forecasts, they still show that the Fed has work to do to reach its 2% inflation target.

“CPI month-over-month change has got the Fed zig-zagging,” Gundlach said. “The market has gone from an aggressive assumption of Fed cuts to just one cut in 2025.”

The Fed has cut benchmark rates by a full percentage point since September, a month during which it took the unusual step of lowering by a half point. In December, the central bank projected only two quarter-point rate cuts in 2025, fewer than the four cuts it previously forecast.

“The Fed is now in sync with the market, and the market is not given further signals for a change,” Gundlach said. “That is consistent with the Fed slowing down its change of monetary policy.”

Futures pricing continued to imply a near certainty that the Fed would stay on hold at its Jan. 28-29 meeting but leaned more toward two quarter-point rate cuts through the year, assuming quarter percentage point increments, according to CME Group.

Citigroup is set to report its fourth-quarter earnings Wednesday morning ahead of Wall Street’s opening bell.

Here are some of the key metrics to watch and what analysts are expecting from the bank, according to LSEG:

• Earnings per share: $1.22
• Revenue: $19.49 billion

Growth in investment banking and equity markets revenue helped drive a better-than-expected report for Citi in the third quarter, and those could be sources of strength again in the fourth quarter. Chief financial officer Mark Mason said at a Goldman Sachs conference in December that Citi was seeing investment banking fees and the markets business up double-digit percentages year over year, according to a transcript from FactSet.

Year-over-year comparisons for fourth quarter income metrics may be complicated by charges Citi booked in the final period of 2023.

Investors will also be looking for progress updates about CEO Jane Fraser’s turnaround efforts. Fraser took over the bank in March 2021 and has focused on slimming down the company, including selling off some international units.

Citi’s stock was a strong performer in 2024, rising nearly 37% on the year. The stock is up more than 4% so far this year.

Wells Fargo shares climbed Wednesday after the bank reported better-than-expected earnings and issued strong guidance on net interest income for 2025.

Here’s what the bank reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Adjusted earnings per share: $1.42 vs. $1.35 expected
• Revenue: $20.38 billion versus $20.59 billion expected

The San Francisco-based lender said it expects 2025 net interest income, a key measure of what a bank makes on loans, to be 1% to 3% higher than 2024’s number of $47.7 billion.

Shares of Wells jumped nearly 2% in premarket trading Wednesday following the release of earnings.

“Our solid performance this quarter caps a year of significant progress for Wells Fargo,” CEO Charlie Scharf said in a statement. “Our earnings profile continues to improve, we are seeing the benefit from investments we are making to increase our growth and improve how we serve our customers and communities, we maintained a strong balance sheet, we returned approximately $25 billion of capital to shareholders, and we made significant progress on our risk and control work.”

This is breaking news. Please check back for updates.