Total Return Webcast (Macro) Presented by Jeffrey Gundlach 9-14-23

In this macro-focused segment of the Sept. 14, 2023, DoubleLine Total Return Webcast, Peace, Love & Understanding, CEO-CIO Jeffrey Gundlach reviews the state of the markets, the inflation fight and what assets are appealing with an assist from Elvis Costello’s 1979 cover of (What’s So Funny ’Bout) Peace, Love & Understanding.

Mr. Gundlach kicks off with Understanding (1:15), with him painting a picture of where we are and where we are headed with regard to government activity. Among other topics, Mr. Gundlach reviews the state of the Federal Reserve’s tightening cycle, noting, “With these interest rates going up, we’re facing a really big challenge that I’m sure the Fed is aware of and thinking of, but I think all investors should think about, too. And that is the growing interest burden.”

In the Peace section (7:30), he begins with a look at inflation and the degree of success the Fed has had in reining it in, including the difficulties he thinks will linger in lowering core PCE and supercore PCE. Despite the lack of substantial movement in those two prints, Mr. Gundlach says the “bond market sees no inflation problem at all,” adding, “The bond market seems on its pricing of nominal bonds to TIPS seems pretty happy with the actions the Fed has taken and the style in which they’ve done it.” He then turns the spotlight on recession indicators (18:46), with a rundown of the gauges that have caused some economists to overstate the recession and metrics that have Mr. Gundlach looking for a recession to arrive next year.

He concludes his macro review with Love (28:25), discussing the segments of the market that are worth loving – mortgages, including non-Agency CMBS – and not loving – equities.

Mr. Gundlach concludes the episode by answering some submitted questions from viewers. (42:17)