Gundlach's Debt Hedge: Low Coupon US Treasuries

Bond guru Jeffrey Gundlach of DoubleLine Capital is shifting his funds, swapping higher interest US Treasuries for lower coupon versions. This move aims to protect against a potential government debt restructuring during a severe recession. The move could drastically cut interest rates, easing budget strain without defaulting. However, such a change could crash bond prices and bar the US from borrowing for decades. Despite the high debt-to-GDP ratio, credit default swaps suggest low odds of default. Gundlach, managing nearly $100 billion, has long warned of debt risks, with investors watching as the debt pile grows. Support the show:Get a discount at https://solipillow.com/discount/dnn. Advertise on DNN:[email protected] This is an automated, high-level news summary based on public reporting.Report issues to [email protected]. View sources & latest updates:https://sources.thednn.ai/74c0a53a912c90cd