Jeffrey Gundlach, the billionaire CEO of DoubleLine Capital, said Wednesday that the U.S. is likely to enter a recession within the next nine months.
Gundlach said stocks are becoming less attractive compared to bonds, and predicted a recession would likely occur in the first half of 2024. “I think the market is significantly overvalued,” Gundlach said internally. webcast. “It’s hard to love stocks when the risk premium is significantly lower than it has been in the last 17 years.”
He also pointed out that excessive government spending risks leading to an inflationary recession or “stagflation,” which Democrats really don’t want. “This is a very extreme level,” Gundlach continued. “In terms of the relationship between stock and bond yields, this is very similar to the situation before the global financial crisis, so just take it for what it is.”
U.S. housing market suffers biggest drop in 10 years |@DailyCaller
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— Kay Smythe (@KaySmythe) May 22, 2023
This is not the first time Gundlach has warned Americans about an impending recession. In March 2023, he said current financial trends indicate an “imminent recession,” noting that the U.S. Treasury yield curve was aggressively steepening at the time.
And Gundlach has big concerns about how the government will respond when this actually explodes. “I have doubts that the government’s response will be too violent, as it has been with each recession in recent decades, and that it could lead to inflation,” he said. There is a gender,” he said. “There is a possibility of an inflationary recession.” (Related: Bangladesh will probably lose 80 percent of its power due to inflation)
His concerns have been echoed by countless financial experts over the past two years. One billionaire, Stanley Druckenmiller, even joked about using cyanide to avoid future economic chaos.
