![\"Billionaire](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2023\/02\/gundlach-recession-768x432.jpg\")
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Billionaire Jeffrey Gundlach, aka the \u201cBond King,\u201d has warned of \u201cpainful outcomes that are coming in the next recession.\u201d Commenting on the Federal Reserve\u2019s attempt to curb inflation, he cautioned: \u201cThe more you try to reduce the severity of problems, you\u2019re going to end up ultimately having a very high severity problem.\u201d<\/strong><\/p>\n Jeffrey Gundlach, chief executive officer and chief investment officer of investment management firm Doubleline, shared his outlook on the U.S. economy in an interview with Yahoo Finance last week. Gundlach is nicknamed \u201cthe Bond King\u201d after he appeared on the cover of Barron\u2019s as \u201cThe New Bond King\u201d in 2011. According to Forbes, his net worth is currently $2.2 billion.<\/p>\n \u201cIt doesn\u2019t matter if it\u2019s a soft landing or a hard landing,\u201d he began. \u201cPeople are always asking me this question: \u2018How bad is the recession going to be?\u2019 It doesn\u2019t matter, as long as we\u2019re going into a recession, you have to have a certain degree of protection.\u201d Gundlach added:<\/p>\n We could see some real interesting, painful outcomes that are coming in the next recession, whether it\u2019s very severe or not.<\/p>\n<\/blockquote>\n He noted that one indicator \u201cthat is the slam dunk on recession is if the unemployment rate crosses its 36-month, three-year moving average,\u201d emphasizing: \u201cWe\u2019re pretty far away from that, but that doesn\u2019t happen at the front end of a recession. If that happens, it suggests you\u2019re in more of a hard-landing type of recession.\u201d<\/p>\n The billionaire explained that the Federal Reserve, \u201cin a backhanded way \u2026 are sort of predicting a recession themselves\u201d because they said in December that \u201cthe unemployment rate was going to end this year at about 4.6%, up 100 basis points.\u201d He stressed: \u201cHistorically when you get more than a 50-basis-point rise in the unemployment rate, you\u2019ve never avoided a recession.\u201d<\/p>\n Gundlach further explained: \u201cWhen you have this, sort of, attempt to never have a significant downturn in the economy \u2014 Fed to the rescue, zero interest rates, quantitative easing \u2014 what you\u2019re trying to do is avoid any type of hard landing ever.\u201d He continued: \u201cThat type of activity violates Gundlach\u2019s rule of financial physics, and that is that the frequency of problems times the severity of problems equals a constant.\u201d The billionaire opined:<\/p>\n The more you try to reduce the severity of problems, you\u2019re going to end up ultimately having a very high severity problem.<\/p>\n<\/blockquote>\n\u2018Bond King\u2019 Jeffrey Gundlach on the Next Recession<\/h2>\n
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