Jeffrey Gundlach, CEO of DoubleLine Capital, provides his market outlook for 2024 and discusses the Fed's fight against inflation on “How to Make Money.”
As the list of big corporate job cuts looks set to grow in 2024, a billionaire bond fund manager is questioning some of the data.
Jeffrey Gundlach, CEO of DoubleLine Capital, known as the “bond king,” called the state's unemployment rate “hard to believe” in an interview with “Making Money with Charles Payne.” Stated.
“Amazingly, I think 88% of states have D.C., so there are 51 of them, and 88% of them have reported an increase in unemployment over the past six months. And I We're having a very hard time squaring this circle,'' Gundlach told FOX Business host Charles Payne on Thursday.
“If 88% of states are reporting an increase in unemployment, how is it possible that the national unemployment rate remains very low and stable?” he further argued.
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After rising for three straight months, the US unemployment rate unexpectedly fell to 3.7% due to a significant drop in the teen unemployment rate, according to data from the December jobs report.
Jeffrey Gundlach, founder of DoubleLine Capital, also known as the “Bond King,” spoke about the employment outlook on the topic “Making Money with Charles Payne.” (Fox News)
But the pace of job cuts by U.S. employers will accelerate in 2023, with layoffs jumping 98% from the previous year, according to a recent report from business and management firm Challenger, Gray & Christmas.
Gundlach said states with declining unemployment rates, such as Texas, Pennsylvania, North Dakota and Wyoming, may not be able to offset rising unemployment rates in states such as Florida, Illinois, California and New York. He pointed out that it was expensive.
“I'm skeptical about this data,” the bond king said. “The leading economic indicators have been very negative for a long time. We've had an inverted yield curve for a long time. But my biggest concern right now on the economic front is what we're seeing from the states.”
Jeffrey Gundlach, CEO and CIO of DoubleLine Capital, also known as the “Bond King,” discusses the macroeconomic trends to watch amid the looming recession.
He also noted similarities between the current market and the “inflation struggles” of the late 1970s and early 1980s, as well as similar recession concerns.
“The inverted yield curve has been going on for about 80 weeks now, probably a little over 80 weeks,” Gundlach said. “The only episode in which an inverted yield curve lasted longer before a recession hit was the late 70s and early 80s, which, interestingly, was also the last time the war on inflation occurred.”
“The 10-year yield was 108 basis points lower than the 2-year yield, and now it's 18 basis points. Once that reversal starts, you really start to be wary of a recession,” he added. “And the fact that we haven't seen a recession after more than 80 weeks of inverted yields is very flawed logic to say a recession isn't coming.”
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Former Council of Economic Advisers Acting Chairman Thomas Phillipson reacted to December's core PCE price inflation data, claiming the report was “good news” for the US economy.
Gundlach said he expected Federal Reserve Chairman Jerome Powell to cut interest rates as he looks to how markets will play out in 2024.
“It's all political. I think it's in the background,” the bond king said of the Fed's decision. “fact [that] It's a presidential election year. But what I'm really thinking about is that the economy is stable for now, but where are real interest rates? Therefore, I think investors should buy 2-, 3-, and 5-year government bonds. This is because, although interest rates are not very high, they are fixed at a level that exceeds the ever-declining inflation rate. ”
FOX Business' Megan Henney contributed to this report.
