Billionaire bond investor Jeffrey Gundlach dials up his warning of a US recession, pointing to signs of falling demand
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- "Bond King" Jeffrey Gundlach warned that a US recession is imminent, pointing to signs of weakening demand.
- "It's pretty clear that we have the look of soon to be at the front end of a recession," the billionaire investor said.
- Gundlach has consistently rang the alarm on an oncoming downturn as the economy faces a raft of headwinds.
Billionaire investor Jeffrey Gundlach dialed up his warning about an imminent US recession, pointing to fresh signs of falling demand in the economy.
Speaking in an investor webcast, the DoubleLIne Capital CEO said key economic indicators looked "absolutely full on recessionary," per CNBC, referring to trends in the manufacturing and services.
Forecasts for the world's largest economy have been growing increasingly grim following the past year's surge in interest rates and amid a credit squeeze caused by the recent banking turmoil.
Deutsche Bank predicted the economy is on track for its first "policy-led boom-bust cycle" in four decades, with a recession set to hit by year-end. Veteran economist David Rosenberg recently said the US has already entered a recession.
"It's pretty clear that we have the look of soon to be at the front end of a recession," Gundlach said. He highlighted a plunge in delivery delays, measured by the Institute of Supply Management Index, toward a 30-year low, as a sign of weakening demand.
This is not the first time Gundlach, often called "Bond King" for his success in fixed-income investing, has warned of a oncoming US recession. In February, the fixed-income expert said investors need to prepare for a downturn rather than try prevent it.
Despite rising recession risks, the US labor market still remains robust, and that's probably what has encouraged the Federal Reserve to stick with its hawkish monetary policy so far, Gundlach suggested. The latest payrolls data showed American employers added 339,000 jobs in May, well above economists' expectations.
"We're at very low unemployment. That is what is keeping the Fed on the snugger side," Gundlach said.