Jeffrey Gundlach expects lower yields - How the US key interest rate and the yield on government bonds are developing.

Jeffrey Gundlach expects lower yields - How the US key interest rate and the yield on government bonds are developing.

According to a report by finanzmarktwelt.de, DoubleLine Capital boss Jeffrey Gundlach predicts that the 10-year Treasury yield is likely to fall into the low 3% range next year. He reacted to the Federal Reserve's decision to leave key interest rates unchanged and to promise interest rate cuts. Gundlach assumes that the yield curve will de-invert and bond prices will continue to rise. He expects the Federal Reserve to cut interest rates by 200 basis points next year and warns against further easing of monetary policy.

The implications of this forecast could be far-reaching. Falling yields on government bonds result in a lower cost of capital for companies, which can encourage investment and growth. At the same time, investors could increasingly flee to high-yield asset classes such as stocks or alternative investments, which influences demand and prices in these areas. Lower interest rates may also lead to increased demand for credit from consumers and businesses, which in turn could stimulate the economy.

However, it is important to note that too low returns can create the risk of bubble formation and inadequate returns for long-term investors. Additionally, low interest rates could have a long-term impact on the profitability of banks and insurance companies, which could impact the financial sector as a whole.

Developments in the bond market should be closely monitored by investors, businesses and consumers as they may impact various aspects of the economy and financial markets.