WHEN: Today, Wednesday, December 11, 2019
WHERE: CNBC's "Fast Money Halftime Report" – Live from DoubleLine Capital HQ in Los Angeles, CA
The following is the unofficial transcript of excerpts from a CNBC EXCLUSIVE interview with Jeffrey Gundlach and CNBC's Scott Wapner on CNBC's "Fast Money Halftime Report" (M-F 12PM – 1PM) today, Wednesday, December 11th, live from DoubleLine Capital headquarters in Los Angeles, CA. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2019/12/11/watch-cnbcs-full-interview-with-jeffrey-gundlach.html.
All references must be sourced to CNBC.
Jeffrey Gundlach on Fed Rates:
Which means that the Fed is now comfortably on hold. But what Jay Powell has done is he raised rates four times in 2018, and then cut rates three times in 2019. What—basically, we've gone nowhere. We just put ourselves on a wild ride, which I believe was unnecessary.
Jeffrey Gundlach on Recession Unlikely:
The odds are against a recession occurring before the end of 2020. And what has happened is consumer evidence has really held up. And the year-over-year leading indicators from the conference board, we're at 7% year-over-year fifteen months ago, which is really strong. And you have never had a recession in the last several decades without leading indicators first going negative. So, that is really the canary in the coal mine.
Jeffrey Gundlach on Credit Risk:
But when I'm talking about playing defense, what I'm really talking about is credit risk. Because credit risk to me right now it is very dangerous. There is a whole cocktail of fundamentals that I think lead to wanting to be early on exiting the corporate bond market. And I think the time to be exiting the corporate bond market is presently. Because the corporate bond market is enormously bigger than it was prior to the global financial crisis.
Jeffrey Gundlach on the Corporate Bond Market:
The percentage of the investment grade corporate bond market that's rated single A or higher is at an all-time low. It used to be two-thirds of the corporate bond market was rated single A or higher, 25 years ago. Now it is 35% of that market. So, the rating is actually worse. So, the yield spread should be higher than average. Not at near a low level. So, that is a very bad sign.
Jeffrey Gundlach on Jay Powell:
If the Federal Reserve has a purpose it should be to have an outlook and follow it, regardless of what the market does. And instead Jay Powell capitulated and went along with what the bond market has said. And now, the bond market is in sync with the Fed.
Jeffrey Gundlach on No Trade Deal:
I've been consistently stating that there will be no trade deal until the 2020 election. There is absolutely no reason for China to do a trade deal on the terms that the United States wants when there is an election coming up in less than a year, and potentially they could have somebody else that is more old school and wants the genie back in the bottle and would take the tariffs away.
For more information contact: