Jeff Gundlach, CEO and CIO of DoubleLine Capital, recently told Barron's that "we might have a panic into Treasuries."
Gundlach: We might have a panic into Treasuries that might take out last year's low yield of 1.4%. I'm not saying it's the base case, but something shaky, maybe a recession or a problem internationally, could trigger that. Everyone always says, "What's the catalyst?" Well, you never know until after the fact; otherwise, it would be priced in the market. But there is no inflation. Just look at commodity prices. And [Federal Reserve Chair nominee] Janet Yellen's recent testimony was really interesting when she said—and here is the big word—that it was "imperative" that we not withdraw stimulus too soon. That's a pretty strong word. I think they are worried about deflation.
Either way, I don't see how this gap between SPY and TLT doesn't close a bit.
|Source: TradingView.com (SPY is in blue, TLT is in red)|