Jeffrey Gundlach, CEO of DoubleLine Capital, warned that the next US recession could trigger a debt crisis, leading to a sharp rise in long-term Treasury yields — which would go against decades of conventional wisdom that bonds can act as a safe haven during difficult economic times. This situation may prompt the Federal Reserve and the Treasury to adopt unconventional policies, such as reversal of central bank purchases of long-term bonds, or even debt restructuring. He said he is focusing on low-term assets to protect Doubleline's funds from further increases in interest rates. “In the event of a recession, the fiscal situation will receive a great deal of attention.” Gundlach said at an event in New York, “Budget deficits can easily reach 12% of GDP. That would result in interest expenses of $3 trillion a year, which is absolutely unacceptable.”

Jeffrey Gundlach, CEO of DoubleLine Capital, warned that the next US recession could trigger a debt crisis, leading to a sharp rise in long-term Treasury yields — which would go against decades of conventional wisdom that bonds can act as a safe haven during difficult economic times. This situation may prompt the Federal Reserve and the Treasury to adopt unconventional policies, such as reversal of central bank purchases of long-term bonds, or even debt restructuring. He said he is focusing on low-term assets to protect Doubleline's funds from further increases in interest rates. “In the event of a recession, the fiscal situation will receive a great deal of attention.” Gundlach said at an event in New York, “Budget deficits can easily reach 12% of GDP. That would result in interest expenses of $3 trillion a year, which is absolutely unacceptable.”