Jeff Gundlach Warned Us Rates Could Fall, And They Did - Here's What He's Saying Now

Earlier today, we saw the yield on the 10-year Treasury note tumble to 2.37%, the lowest level since June 2013.

"It's really hard for me to identify why rates should go higher," said Jeffrey Gundlach of DoubleLine Funds.

In a phone call with Business Insider, Gundlach reiterated his expectation for the 10-year yield to trade between 2.2% and 2.8%, with the risk that it goes below 2.2%.

Most of Wall Street's interest rate gurus came into 2014 confident that rates would actually rise as the U.S. economy was expected to reach escape velocity. In January, the consensus year-end forecast for the 10-year yield was 3.4%.

Gundlach, however, was one of the very few people who believed rates would stay low, especially with the Federal Reserve committed to keeping rates low with its loose monetary policy.

It's important to note that U.S. Treasuries don't have the lowest yields in the world. French and German government bonds have yields that are about 100 basis points lower than those of Treasuries. In other words, those European bonds actually make U.S. bonds look cheap, meaning that yields have room to go lower.

Gundlach said that we could see Treasury yields rise with European yields were to rally. However, he reminded us that the European economy continues to be in much worse shape.

If anything, Europe is on the brink of deflation, which means rates could actually go lower.

Noting that the U.S. economy had so far failed to deliver a 3%+ rate of GDP growth, Gundlach said the Q3 GDP reports would be important.

Overall, Gundlach hasn't changed his views on the markets and the economy. When you consider the fact that his big macro calls have been on point, he really doesn't need too.