"We're looking for signals that the interest rate increase is over and frankly we don't see that right now," says Jeff Gundlach, expecting the 10-year yield to drift higher to about the 3.10 area. "We went from 'I don't care about volatility and I want income' to 'I don't care about income, I don't want volatility.'"
The taper is coming, he says, and the selling surrounding its inception might offer a tasty buying opportunity in bonds. Gundlach made a boner of a bullish call on Treasurys at the start of the summer with the 10-year yielding about 2.1%. There was no inflation anywhere, he said then, and a rate over 2.4% would hit the economy hard enough to have the Fed threatening expanded QE.