While the Federal Reserve has announced that it will likely end its bond purchases in October, it may well resume quantitative easing by 2020, says star bond investor Jeffrey Gundlach, CEO of DoubleLine Capital.
He told the
Financial Times that he sees a wave of problems causing the move: copious high-yield debt that companies must refinance, huge budget deficits as baby-boomers drain Social Security and Medicare funds, aging populations in China and other emerging markets and the maturation of the Fed's Treasury portfolio.
"It seems like one of the consequences of this zero interest rate policy is you've pushed out the problem of refinancing, of rolling over, but you've really compounded the magnitude of it. And it seems to be focused around the 2020s," Gundlach stated.
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Meanwhile, Gundlach doesn't think the economy is all it's being cracked up to be. While the economy grew 4 percent in the second quarter, "I would be surprised to see full-year 2014 GDP exceed 2 percent," he noted.
Gundlach's not the only one pessimistic about the economy. A total of 64 percent of Americans say they are still suffering from the recession, and 40 percent say a household member lost a job over the last five years, according to a new
Wall Street Journal/NBC News poll.
"People are continuing to tell us ways [the Great Recession] is still impacting them today," GOP pollster Bill McInturff, who helped conduct the survey, told NBC. "Those stories are pretty grim."
The recession officially ended in June 2009.
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