"New Bond King" Jeffrey Gundlach recently cautioned that U.S. stocks have not yet reached a bottom, the hope for Federal Reserve interest rate cuts this year has evaporated, but the current moment presents a good opportunity to buy gold.

On March 24, Gundlach stated in an interview with CNBC that despite recent declines in risk assets, the VIX index, which measures market fear, has not shown a true "clearing signal." He believes that only when the VIX index surges to around 40 would it signal a full宣泄 of market sentiment, indicating a buying signal for investors.

Simultaneously, Gundlach poured cold water on the prospects for Fed rate cuts this year. He pointed out that with inflation remaining stubbornly high, the rationale for the Fed to cut rates is disintegrating. He specifically referenced Fed Chair Jerome Powell's recent press conference remarks: "If we don't see progress [on inflation], we won't see rate cuts."

**VIX Below 30, Stock Market 'Clearing' Not Yet Arrived** Gundlach emphasized in the interview that the recent weeks' decline in risk assets was not accompanied by a full-blown panic. He noted, "The VIX never really broke above 30, which is very strange." In Gundlach's view, a true market bottom often coincides with extreme fear. He stated that many market participants believe a VIX reading above 40 signals a thorough market clearing, which would be the time to buy. However, despite market volatility, the VIX has not reached that level. This implies that U.S. stocks may still have further downside, and investors should remain cautious at this stage, avoiding reckless attempts to "buy the dip."

**Rate Cut Expectations Unravel, Inflation the Major Obstacle** Regarding the widely watched Federal Reserve monetary policy, Gundlach offered a pessimistic forecast. He believes the justification for Fed rate cuts this year is falling apart, and investors should no longer rely on anticipated cuts as a reason to be bullish on risk assets. Gundlach pointed out that the Fed's inflation forecasts are overly optimistic. He stated that if commodity prices, particularly energy, remain at current levels, the inflation rate is likely to stay above 3%, far from the Fed's 2% target. He specifically highlighted Powell's off-the-cuff remark during the press conference: "If we don't see progress, then we won't see rate cuts." Gundlach believes this plain language indicates the Fed will not easily cut rates until inflation is effectively controlled. He even noted that the current yield on the two-year Treasury is above the federal funds rate, with market pricing implying a slightly higher probability of a rate hike than a cut.

**Gold Offers Buying Opportunity, Commodities in Bull Market** Despite his cautious stance on stocks and bonds, Gundlach showed strong interest in gold and commodities, believing now is an excellent time to increase exposure to these assets. Gundlach mentioned that although he reduced his gold position in January, he remains bullish on gold long-term. He noted that gold, after its sharp rally, was due for a pullback. However, at current levels, he sees a very good buying opportunity. "I like it more today than I did two weeks ago," Gundlach said. "I think it's in a bull market." He also expressed that the commodities index, after falling below its 50-day and 100-day moving averages, should find strong support at the 200-day moving average.

**The Biggest Danger Zone: Private Credit Replaying 'Wild West'** During the interview, Gundlach spent significant time warning about a major overlooked risk: the private credit market. Due to excessive valuations in public markets (stocks and bonds) in 2020 and 2021, a flood of capital entered the opaque private credit market. Gundlach used a vivid analogy: "It's like the Wild West frontier in the 1830s. Initially, everyone was a law-abiding prospector, but after gold was discovered, speculators and ruffians poured in, crime rates soared, and the market descended into chaos." Data is already sounding alarms. Gundlach revealed a startling industry fact: "Recently, an extremely respected institution marked down the valuation of its private credit fund by 19% in a single day. This 'elevator shaft' type of straight-down drop indicates serious problems with asset quality." Even more严峻 is the situation with CCC-rated (junk-grade) bank loans. The credit spread for CCC-rated bank loans has surged to nearly 1900 basis points. Gundlach did the math: If the default rate for private credit portfolios reaches 8% this year, with a recovery rate of only a dismal 50%, investors would face a direct principal loss of 4%. This loss magnitude far exceeds the additional yield spread compensation that private credit offers over public credit.