Gundlach Sees Trump Presidency With Higher Deficits Whoever Wins

  • Clinton likely to lose nomination, bond-fund manager says
  • More debt means rising interest rates, according to investor

Republican Donald Trump appears to have the best chance of winning the White House, according to money manager Jeffrey Gundlach of DoubleLine Capital, who predicts surging U.S. deficits whoever prevails.

For the Democratic nomination, Vermont Senator Bernie Sanders may have the advantage over former Secretary of State Hillary Clinton, the Los Angeles-based bond-fund head said Friday at a Tiger 21 conference for high-net-worth investors in Beverly Hills, California.

“It could turn into one of the most interesting elections of all time,” Gundlach said. “I kind of think Donald Trump’s going to win. I find it hard to believe, but I can’t find the alternative.”

The candidates are battling for next week’s primary in New Hampshire after Trump, the billionaire real estate developer and reality television star, finished second in the Iowa caucus on Feb. 1, behind Texas Senator Ted Cruz and ahead of Florida Senator Marco Rubio, while Clinton edged out Sanders. Gundlach said it might be a three-way race, with former New York Mayor Michael Bloomberg jumping in. The founder and majority owner of Bloomberg LP, parent of Bloomberg News, has been exploring the possibility of an independent campaign, the New York Times reported last month.

The election outcome is likely to lead to higher interest rates as the nation’s debt rises, Gundlach said.

"Unfortunately, I believe the outcome of the election will be a very large budget deficit,” he said, pointing to prospects for more military spending under Trump or “free everything” under a Sanders administration.

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