Stocks Stumble as ‘Bond King’ Gundlach Unveils $3 Billion Daily Dilemma!

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Ah, the illustrious “Bond King,” Jeffrey Gundlach, has graced us with his financial wisdom, declaring that the stock market is floundering like a fish out of water, all thanks to a rather extravagant $3 billion daily expense draining the government’s coffers. Who knew fiscal responsibility could be so costly? 💸

In a riveting tête-à-tête with CNBC, the CEO of DoubleLine Capital lamented that the S&P 500 has relinquished most of its gains since the Federal Reserve embarked on its rate-cutting escapade in the third quarter of 2024. One might say it’s a classic case of “what goes up must come down”—unless, of course, you’re talking about government debt, which seems to be on an unending ascent. 📉

According to our dear Gundlach, risk assets like equities typically enjoy a delightful romp upward when the Fed decides to slash interest rates. Yet, with the S&P 500 plummeting to depths not seen since last September, he suggests that something far more sinister is afoot in the stock market. Perhaps a ghost of fiscal policies past? 👻

“Since the Fed began its rate cuts back in September, bond yields remain stubbornly high, and the stock market is doing a rather impressive impression of a sloth. This is an unusual time, indeed, where the Fed is cutting rates by 100 basis points and yet, we’re still waiting for that elusive rally in the 10-year Treasury bond…”

“And let’s not forget, we’ve also been deprived of a stock market rally since the Fed started its interest rate reductions. There’s that old adage, ‘Don’t fight the Fed,’ which is supposed to imply that if the Fed is cutting, one should remain long on risk. Alas, it appears this time, the adage has taken a holiday.”

“I suspect this theme will persist as we trudge forward into the murky waters of economic uncertainty.”

“We are, in fact, grappling with a rather large conundrum… this interest expense. It’s over $3 billion a day on the Treasury debt.”

Interest expense, for those unacquainted with the finer points of government finance, is the price the US government pays to its loyal debt holders, currently totalling a staggering $36.22 trillion. The nonpartisan, nonprofit Committee for a Responsible Federal Budget (CRFB) has revealed that the government coughed up a jaw-dropping $882 billion in interest costs during the 2024 fiscal year, which, for those keeping score, ran from October 1st, 2023, to September 30th, 2024. Talk about a budgetary black hole! 🕳️

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2025-03-24 23:02