Jeffrey Gundlach, CEO of DoubleLine Capital warns conditions for a recession are ripe but not imminent. Gundlach discusses his favorite indicator, the consumer expectation of the future one year forward minus the current situation, which has been trending towards recessionary levels. He also discusses inflation and the factors impacting it. He notes that shelter is a large factor, with housing being stickier than expected despite a rise in mortgage rates. Core goods are contributing almost nothing to inflation. He also discusses the Producer Price Index (PPI), which has come down to pre-pandemic levels, Ex-food and energy is at 3.2%, and import prices are negative 4.8%. Gundlach believes that these low inflation numbers make bonds a more attractive asset. He recommends a 30-60-10 portfolio mix, with 10% in real assets such as gold.
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