In a universe not so far away, billionaire Jeffrey Gundlach, also known as the ‘Bond King’ (a title that sounds far more regal than it actually is), has come to the startling conclusion that the Federal Reserve might just have to whip out its magic money printer to keep the U.S. Treasury market from sinking faster than a lead balloon.
During a riveting chat at the Bloomberg Credit Forum—where the coffee is strong and the predictions are even stronger—Gundlach, the founder of DoubleLine Capital, suggested that the Fed will likely need to engage in a little quantitative easing (QE) to counteract the apparent lack of interest in long-term U.S. Treasuries. Because, you know, who doesn’t love a good old-fashioned money printing spree?
Now, QE is essentially when a central bank decides to buy up assets, usually government bonds, in a bid to inject money into the economy. Think of it as the Fed’s version of a financial defibrillator, aiming to shock the economy back to life while simultaneously reducing long-term interest rates. It’s all very scientific, really.
Meanwhile, investors have been flocking to short-term bonds like seagulls to a dropped chip, with Warren Buffett’s Berkshire Hathaway reportedly owning at least 5% of the short-term T-bill market. Because why not? Short-term bonds are like the fast food of the bond world—quick, easy, and probably not the best for your long-term health.
With demand for long-term Treasuries plummeting faster than a cat off a hot tin roof, yields are skyrocketing to levels that could make even the most stoic investor wince. Gundlach predicts that once yields hit around 6%, the Fed will have no choice but to dust off its QE playbook and start printing money like it’s going out of style.
//www.youtube.com/watch?v=98-vanEWj8E[/embed]
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2025-06-14 15:01