Bond king Jeffrey Gundlach still sees a U.S. recession coming. Here's when.

By Vivien Lou Chen

Gundlach, regarded as one of the most influential people in financial markets, has been off about the precise timing of a recession

Jeffrey Gundlach, chief executive of investment-management company DoubleLine Capital, is continuing to hold on to a view that he's had since at least late last year - that the world's largest economy will likely experience a recession. In an interview with Fox Business Network's "Mornings with Maria" show, Gundlach responded "of course" when asked whether he thought the U.S. would still see an economic downturn, although he said it's "hard to say" whether it will happen this year. But he said "sure" to the idea that a recession could come in either 2024 or 2025, according to a transcript of the interview.Gundlach has been called the "King of Bonds" and is regarded as one of the most influential people in financial markets, but like many others, he has been off about the precise timing of a recession. As far back as September and November, he was reported as saying that a recession would likely arrive by the first half of this year. Instead, the economy has managed to defy expectations, although this might be starting to change.

Elevated inflation, higher interest rates and rising rates of household debt are likely to keep weighing on the economy this year, according to the Conference Board, which on Friday released its leading economic index showing a decline in April, for the second month in a row. Meanwhile, the New York Fed's Empire State factory gauge, released last Wednesday, weakened further in May, falling to negative 15.6. It was the sixth straight reading in a row below zero, which is a sign of deteriorating conditions.

"I think the data that's come out is quite concerning over the past week," Gundlach said in the interview. "I mean ... a month ago, if you subdivide the economy into six or seven major sectors, all of them were experiencing positive growth. All of a sudden, in those same numbers this year, more are negative than positive.

"And the positive ones are less positive," he continued. "So, yes, I think that the lifestyle adjustment that was allowed by all that money printing got people to a lifestyle that they decided that they weren't getting checks from the government, but they were willing to put it on a credit card. And those credit-card bills are really starting to add up."

On Tuesday, financial markets held relatively steady amid a lack of major data releases. All three major U.S. stock indexes DJIA SPX COMP finished higher. Meanwhile, yields on 2-, 10-, and 30-year Treasurys closed slightly lower for the first time in four sessions.

-Vivien Lou Chen

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05-21-24 1601ET

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