In a recent interview on CNBC's "Closing Bell," DoubleLine Capital CEO Jeffrey Gundlach expressed his belief that interest rates are set to decline as the economy deteriorates further and heads into a recession next year. Gundlach, often referred to as the "bond king," cited several indicators pointing towards an economic slowdown.

One of the indicators Gundlach mentioned is the rising unemployment rate, which, although still relatively low, has been trending higher. Additionally, he highlighted the inverted spread between 2-year and 10-year Treasury yields, which has remained in this state for over a year and has recently begun to steepen. Gundlach considers this yield curve inversion as a sign of an impending recession.

Gundlach also predicted an upcoming wave of layoffs, noting that hiring freezes have already been observed and layoffs have started to be announced, particularly in financial and technology firms. He voiced concerns about the growing federal deficit, which reached nearly $1.7 trillion at the end of the most recent fiscal year. This adds to the already staggering U.S. debt of nearly $34 trillion, leading Gundlach to assert that current interest rates and the current level of government spending are not sustainable.

Billionaire investor Stanley Druckenmiller expressed similar concerns regarding government spending and highlighted the missed opportunity of issuing debt at lower long-term rates in previous years. Druckenmiller warned that this could result in tough choices in the future, such as potential cuts to entitlement programs like Social Security.

Regarding the Federal Reserve's actions, Gundlach stated that he does not expect them to be as aggressive as suggested by the current dot plot, which indicates one more rate hike this year. Fed Chair Jerome Powell affirmed that the rate-setting committee is not yet considering a rate cut and will only do so once inflation is brought under control.

With Gundlach's prediction of falling interest rates and an impending recession in 2024, investors and market participants will closely monitor economic indicators and the Federal Reserve's actions in the coming months. As concerns surrounding the federal deficit persist, there may also be discussions about potential consequences and necessary adjustments to government spending policies.

Overall, Gundlach's insights and predictions add to ongoing discussions about the state of the economy and the potential impact on interest rates and financial markets.