The growing U.S. budget deficit combined with increasing interest rates may be leading to fiscal trouble, says Jeffrey Gundlach, chief investment officer of DoubleLine Capital, Bloomberg reports.
“Here we are doing something that almost seems like a suicide mission,” he said. “We are increasing the size of the deficit while we’re raising interest rates.”
The recent tax cuts and increased federal spending means the U.S. deficit could balloon toward 125% of GDP after 2030, DoubleLine calculates, using Congressional Budget Office projections.
Gundlach also sees the 10-year Treasury yield rising to 6% by 2020 or '21 and oil rising as high as $90 a barrel.
Previously: Futures inch up ahead of Fed statement (June 13)