Gundlach Warns Next Recession Could Trigger Treasury Debt Crisis

07:39 PM EDT, 09/17/2026 (MT Newswires) -- DoubleLine Income Solutions Fund (DSL) could face a debt crisis that sends long-term Treasury yields sharply higher in the next US downturn, CEO Jeffrey Gundlach said at a New York event, Bloomberg reported Thursday. Gundlach said he's positioning toward low-duration assets and sees potential for a repeat of the Fed's Operation Twist or a Treasury debt restructuring involving coupon cuts, according to the report. "You would have the budget deficit go easily to 12% of GDP. That would create $3 trillion of interest expense probably per year, and you just can't do it," Gundlach said, the report said. He estimated the Fed could act around a 6.5% yield level, and said he's "a little less negative on the long end" than a year ago, though still positioned for higher yields, per the report.