Jeffrey Gundlach, CEO of the investment company DoubleLine Capital LP, told CNBC on Monday that a recession could hit the United States "in a few months," emphasizing that the Federal Reserve should have raised rates faster.
"There is a recession coming, it's only a question of how severe it is going to be," Gundlach stressed, arguing that long-term treasuries should serve as an "umbrella," as they have proven to act as a balance to "wobbling" credit markets. "The chances are better than 50-50 that we're done with the rate hikes," he noted, adding that the Fed will likely cut rates "a couple of times" this year.
"If the Fed continues on this path, the gap between what you can get on Treasury bills and what you can get in the banking system will grow It will counterproductively cause great shrinkage of liquidity...maybe some more problems with unrealized losses," Gundlach stated.
