DoubleLine’s Jeffrey Gundlach on the Fed, Gold and Private Credit

Blurring the lines between conference and festival, this year’s Future Proof brought thousands of attendees to the summery shores of Huntington Beach in Los Angeles. Beyond a long row of brightly colored tents and bold branding, past food trucks and craft beer and DIY candle-making classes, Jeffrey Gundlach took to the main stage and sat down for a candid conversation with CNBC’s Scott Wapner.

In classic Gundlach fashion, he proceeded to air a list of gripes and grievances concerning the U.S. government, the economy, and beyond. Gundlach said he expected a quarter-point trim from the Federal Reserve in November, followed by another 50 basis point cut in December. But he said the Fed had already stayed too tight for too long.

“Now we have a serious chance of a deflationary situation … and layoffs that are coming, which may lead to zero wage growth,” Gundlach said. “I think the Fed is well behind the curve and should get their act together.”

Recession: Ready or Not, Here It Comes

Despite all the handwringing over a soft-landing scenario, Gundlach believes the U.S. has already entered recession territory. He pointed to the unemployment rate hovering definitively above its 36-month moving average as a key recession indicator (known as the Sahm rule). He also alluded to a string of downward revisions on nonfarm payroll reports despite initially strong headline numbers.

Leading indicators have been terrible for two years," he added. "The average hourly average workweek is shrinking in a very convincing way. First, they cut the hours, then they cut the bodies."

Gundlach likened the current housing market to that of 2005-2006 – citing sky-high median home prices relative to disposable income. “The waves of potential problems are crashing on the shore,” he opined. “And I think you’re going to see a very substantial decline in economic growth over the next six months.”