Gundlach: Trump Forcing Downturn to Save the Day Later; Don’t Rule Out Clinton in 2020

Money & Markets | 8/28/2019 | JT Crowe
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“Bond King” and DoubleLine Capital founder and CEO Jeffrey Gundlach is a Donald Trump fan who predicted the reality TV star’s 2016 presidential election victory a year in advance.

Gundlach is known for making audacious predictions (and there’s a big one coming later in this story about a certain 2016 candidate), but he said he just had a feeling Trump would win the highest office in the land.

Time - Trump - Barron - Roundtable - Monday

“The first time I publicly predicted Trump would win was in the Barron’s roundtable, which was the first Monday in January 2016,” Gundlach said in a recent interview with Intelligencer. “And Trump at that point was like 500-to-1 or something in the betting odds — but I was absolutely sure he was going to win. I went through the candidates and … people wanted the dishes to get broken, you know?”

Gundlach’s latest prediction also is a bit of a doozy: Trump is intentionally forcing an economic downturn in order to right the ship just ahead of the 2020 election and come out the hero. But, Gundlach added, it’s a very dangerous game.

Game - Economy - Fed - Rates - Easings

“I think maybe he’s playing a dangerous game of intentionally weakening the economy so the Fed cuts rates and monetary easings work with a lag,” he said. “Cutting rates now would probably be beneficial in the summer of next year, ahead of the election. Also if you put on tariffs, or scare consumers, then maybe you can take the tariffs off and you’re moving consumption from today until 2020.

“That’s potentially a strategy. As I say, it’s pretty dangerous. It’s hard to time the economy by, you know, blunt instruments. I don’t know, it seems like he’s working really hard to get the Fed to cut rates — and the bond market is certainly helping. You know the bond market is telling the Fed...
(Excerpt) Read more at: Money & Markets
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