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Jeff Gundlach: The Perfect Bonds Short Squeeze is on the horizon

Jeff Gundlach comments on US bonds

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Jeff Gundlach, the founder of DoubleLine Capital, warns that the net short positions of 10 and 30-year US bonds are at record levels, and this may lead to the perfect short squeeze. Speculators continue to inflow short-term funds while long-term investors are spreading their long positions. Historically, in such a situation, speculators do not go clean and very often accumulate enormous losses that force them to close the short ones, which further pushes the price (return) upwards.

Record bets can lead to a very sharp fall in bond yields if the Fed takes a moderate stance on tightening monetary policy.

Gundlach said on Friday last week, but his comments still do not pay much attention. At present, 10 and 30-year US bonds are traded at levels close to 3.00%.

Source: CNBC

Photo: Gundlach Twitter


 Trader Petar Milanov

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