CEO of DoubleLine Capital, billionaire Jeffrey Gundlach, said Wednesday that the U.S. will likely hit a recession in the next nine months.
The recession will likely hit in the first half of 2024, Gundlach forecasted, noting that stocks have grown less appealing when considered relative to bonds. “I think the market is pretty overvalued,” Gundlach said during a company webcast. “It’s hard to love equities when the risk premium is the lowest in 17 years, by a lot.”
He further noted that government overspending could risk an inflationary recession, or the “stagflation” Democrats really don’t want to be real. “This is a very extreme level,” Gundlach continued. “This is very similar to the setup prior to the global financial crisis in terms of the relationship between the yield on stocks and bonds, so take that as you will.”
US Housing Market Sees Biggest One-Year Drop In A Decade | @DailyCaller
Did you buy a house in the last year even though I told you repeatedly not to do so?
Well it turns out you might be as screwed as I LITERALLY SAID YOU WOULD BE https://t.co/G9ExQvNskc
— KAY SMYTHE (@KaySmythe) May 22, 2023
This is not the first time Gundlach has warned Americans of the impending recession. In March 2023, he said current financial trends are pointing toward an “imminent recession,” pointing at U.S. treasury yield curves at the time, which were aggressively steepening.
And when this thing really does burst, Gundlach has significant concerns over how the government will respond. “I have this suspicion that the government response will be so wild, as it’s been more wild in every recession going back for decades now, that it could be inflationary,” he noted. “It could be an inflationary recession.” (RELATED: Bangladesh Loses 80 Percent Of Power, Likely Due To Inflation)
His concerns have been echoed throughout the last two years by myriad financial gurus. One billionaire, Stanley Druckenmiller, even joked about using cyanide to avoid the financial upheaval heading our way.