"The market is very expensive. It's very speculative, but earnings just continue to blow out on the upside. I think it's fueled the speculative fervor. Gundlach renewed his warnings about private credit, saying "I sure am" worried when asked whether he's concerned about the sector. "There's something about the private credit market that seems that always needs new investors," Gundlach said."
Investors are not expected to see a Federal Reserve rate cut at the next policy meeting. Inflation has not eased enough to justify cuts, especially given that the two-year Treasury yield is nearly 50 basis points higher than the Fed funds rate. Oil prices have risen due to the Iran war, feeding into US inflation data. After April consumer prices rose 3.8%, the upward inflation trend is expected to continue. DoubleLine models indicate the next headline CPI print will begin with a four. Stocks have remained strong despite inflation concerns, supported by continued upside earnings, though valuations are expensive and speculation is elevated. Private credit is flagged as a risk area because the market often requires new investors.
Read at Fortune
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