Gundlach spoke in a CNBC interview:
- what we’re seeing appears to be deleveraging in the bond market-
- believe there is some forced selling going on in bonds, and is probably not ending
- the Fed is really not in a position to reverse course or resume rate cuts
- the odds favor a recession at this point
- think the Fed will use their balance sheet if things get worse, think they would do that before cutting
- believe that long yields will go up
- believe rates will go up in the next recession at the long end
- “no way” tariffs delay is going to happen, Trump will keep this going
None of this sounds very optimistic from Gundlach. Market professionals are in a dour mood over this dog's breakfast of policy choices.
