#408 Jeffrey Gundlach: We've Crossed to the Hard Side of the Street

Legendary bond investor Jeffrey Gundlach, founder and CEO of DoubleLine Capital, returns to The Julia La Roche Show. He warns that the market has "crossed over to the hard side of the street." With the Shiller CAPE above 42, he says history points to negative real returns for the next decade. Cracks are already showing in AI-related credit, where junk bonds and bank loans have widened sharply while the rest of high yield holds up. Gundlach says he now wants out of the AI "epicenter" entirely. He walks through his current portfolio: equal-weight equities, a barbell of high-quality bonds and local-currency emerging market debt, gold, commodities, and short-duration "dry powder." He expects CPI to print above 4% as oil tops $100 and diesel hits $8 a gallon, and he predicts a 25 basis point hike from Fed Chair Kevin Warsh. He also explains why 30-year TIPS won't protect investors from rising rates and why he's skeptical of Treasury Secretary Scott Bessent's Operation Twist. He sees a dangerous web of private credit, arbitraged credit ratings, and offshore reinsurance, calling private credit the fuse and insurance companies the bomb. He urges annuity buyers to stick with mutual insurers and warns that bailout pressure will be intense when the AI and private markets reckoning arrives.Thank you to our partnersAugusta Precious Metals — To learn more, visit https://juliabuysgold.com/ or text “Julia" to 35052Monetary Metals - learn more at https://www.monetary-metals.com/julia/Links: YouTube https://www.youtube.com/@DoubleLineCapitalWebsite: https://doubleline.com/Webcasts: https://doubleline.com/doubleline-webcasts/0:00 Intro
1:16 Shiller CAPE, a decade of negative real returns?
3:33 The mood turns: AI credit starts to crack
8:10 Gundlach Unlocked: his new portfolio with zero AI exposure
12:12 Gold, plus commodities and dry powder
17:25 Rising rates and the $40 trillion debt milestone
17:55 Operation Twist and the endgame for the debt
22:19 Oil above $100 and a near-empty Strategic Petroleum Reserve
25:12 Why CPI is headed above 4% and Warsh's 2% promise
28:54 The German Bund and GDP model for the 10-year
31:54 When he'd buy long bonds
35:27 Will Warsh hike?
38:31 Advice for Scott Bessent?
40:14 The Fed follows the 2-year
41:20 Dollar debasement and the 30-year TIPS myth
43:29 Why you can't trust credit ratings
46:27 Private credit is the fuse, insurers are the bomb
53:25 Peak optimism: this feels like 1999 and 2006
1:01:18 Final warning: the hard side of the street