Jeffrey Gundlach: Survivor

In his latest webcast, DoubleLine CEO-CIO Jeffrey Gundlach explores why the title “Survivor” aptly describes both today’s fixed-income landscape and Federal Reserve Chair Jerome H. Powell’s resilience. “Almost everyone notable in the bond business when I started is gone,” Mr. Gundlach says, noting how survival itself has become a defining feature of markets and policymakers. With the Fed poised for another rate cut, he highlights the widening gap between the two-year U.S. Treasury and federal funds rate, calling it “an unmistakable signal” that easing will continue.

From a technical lens, Mr. Gundlach digs deep into inflation, labor market revisions and the steepening Treasury yield curve. He observes that over 900,000 jobs were revised away from official data, underscoring the fragility beneath headline employment reports. Meanwhile, gold’s surge past $3,500 and outperformance of Bitcoin signals a broader flight to stores of value. “Gold has become more of a permanent allocation,” Mr. Gundlach notes, as investors hedge against deficits and long-term fiscal strain. He also warns that the eerie parallels between today’s inflation path and that of the 1970s could unsettle bond markets if the pattern continues.

In conclusion, he outlines why U.S. deficits – running at historically high levels even during economic expansion – represent the real structural risk for fixed income. With long-term Treasury issuance still below 2% of total supply, he cautions that fiscal imbalance and a weakening U.S. dollar will increasingly tilt performance toward non-U.S. equities and emerging markets. “If you want to be a survivor in these markets,” Mr. Gundlach says, “you need to position where the curve and flows are moving, not where they’ve been.”