Jeffrey Gundlach often disagrees with the consensus – and is often proved right. For the past two years the co-founder of DoubleLine Capital, which has $80bn in assets under management, has stood almost alone in his bullish view on US government bonds, while most analysts have expected higher yields (reflecting falling prices). Having prevailed in that stand-off, he now says the December American interest-rate rise by the Federal Reserve is hardly the done deal the market thinks it is.
Why? For the same reason he’s been bullish on bonds: he thinks deflationary forces around the world have been underestimated. There are signs of distress in both the leveraged-loan and high-yield bond markets, and commodities are at a 13-year low. “The markets are falling apart”, implying a deteriorating global economy – hardly the sort of environment in which dearer US money makes much sense.