Gundlach Says High-Yield Bond Defaults May Almost Double
- Fed’s policy actions are distorting asset values, he says
- Gundlach manages $52 billion DoubleLine Total Return fund
Jeffrey Gundlach
Photographer: Alex Flynn/BloombergThis article is for subscribers only.
High-yield bond default rates may double as companies struggle with a protracted economic downturn even as the Federal Reserve props up valuations, said Jeffrey Gundlach.
The investment grade corporate debt market has skewed toward lower quality BBB- rated debt, but if just 50% of that were to be downgraded it could fuel a near doubling of the high-yield market, Gundlach said Tuesday on a webcast for his firm’s flagship DoubleLine Total Return Bond Fund.