Gundlach Warns About the Risks Facing Private Credit
Summary
Jeffrey Gundlach warns that private credit resembles 2007, with risks of trust erosion and rising redemptions. He recommends holding 20% cash, allocating 20% to commodities via the Bloomberg Commodity Index, and buying gold on dips to 3500-4200. He also discusses treasury issuance skew and potential yield curve control.
- Gundlach compares private credit to 2007 subprime, citing markdowns and gating risks.
- He warns that redemption requests will rise in June as investors try to exit.
- He recommends a 20% cash position to deploy during market dislocations.
- He favors a 20% allocation to real assets via the Bloomberg Commodity Index.
- He is bullish on gold, suggesting buying at 3500-4200.
- He discusses treasury issuance heavily skewed to short end and potential yield curve control.
- He notes that long-term yields may rise even in a recession due to fiscal concerns.
- He has executed a trade swapping to low-coupon Treasuries to hedge against restructuring.
Trade Ideas
Hold 20% cash to deploy later.
Markets are very high, yields are likely to rise, and cash provides optionality to deploy at lower valuations and higher fixed-income yields. A 20% cash position hedges against market dislocations.
Long commodities for diversification and inflation.
Commodities offer broad diversification and have upward pressure from oil and food prices. The Bloomberg Commodity Index is at new highs, above all moving averages, and provides exposure to real assets that can hedge inflation and fiscal risks.
Buy gold at 3500-4200 levels.
Gold has strong momentum and potential to rally further. Gundlach suggests buying gold aggressively if it pulls back to 3,500, with an initial entry around 4,200, reflecting a bullish long-term view.
Up Next
This Bloomberg Markets video, published May 07, 2026, features Jeffrey Gundlach discussing CASH, DBC, GLD. 3 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Jeffrey Gundlach · Tickers: CASH, DBC, GLD