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- Gundlach estimates 10-year bonds will jump above 2% as US inflation rises
Gundlach estimates 10-year bonds will jump above 2% as US inflation rises
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Loading...DoubleLine Capital founder Jeffrey Gundlach believes. that yields on sovereign bonds will start to rise in the coming months as the Fed begins to boost inflation.
"When you hear the Fed see inflation rising ... it means that the direction of 10-year government securities will also be up, by the time the Fed decides to stop it." says Gundlach.
The investor believes that they can rise above 2.05% yield and this is the first barrier of resistance. The price of bonds falls as yields rise.
The key to Gundlach's argument lies in consumer prices, which he believes will start to rise and drive inflation up. The latest price data confirm the rise in November.
DoubleLine models show consumer prices could rise to 2.5% annually over the coming months. He also warned that any sign of economic slowdown could trigger a rally in profitability.
Trader Martin Nikolov Read more:
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