The University of Michigan consumer sentiment survey Gundlach cited asks if it is a good time to buy a car and a home, among other things. With used car prices up 46%, the answer is self-evident.

Home prices are also soaring out of affordability range in many parts of the country. Gundlach noted that price increases in some geographies are beginning to moderate from 25% to a 14% clip. But if mortgage rates continue to rise, it will contribute to higher home costs.

Homes are still “more affordable than in 2007,” the height of the housing bubble, Gundlach said.

If there is a bright spot in all the survey information, it’s the job market. Gundlach pointed to a Gallup survey in which 58% of Americans said it was a good time to find quality job. That is the highest response to the question in 20 years.

In contrast, some observers like JP Morgan CEO Jamie Dimon have said the U.S. economy looks strong and he expects GDP growth to continue for several years at above the 2% rate of the last two decades. Gundlach believes much of the strength can be traced to government stimulus and is unkely to be sustained once aggressive fiscal and monetary policy fades.

The influential bond investor produced several charts illustrating the dramatic impact of government transfer payments and easy monetary policy on both asset prices and consumer spending. During the bull market that ran from March 9, 2009, to February 9, 2020, the S&P 500 climbed 401%.

Equities then tumbled 34% over five weeks, one of  the briefest bear markets in history. In the 21½ months since March 23, 2020, the S&P has gone almost vertical, rising 113%.

Gundlach then unveiled a chart comparing post-Covid goods spending to post-Great Financial Crisis cumulative spending from 2009 to early 2020. The acceleration in spending over the last 21 months mirrored the surge in stock prices.

During the first 11-year period, U.S. PCE Goods rose 48%. Since the Covid trough in the spring of 2020, that same spending rate rose 46%. Even though much of this spending surge is attributable to March 2020 lockdowns on spending outlets, the vertical upswing in spending and stock prices beginning in the spring of 2020 was striking.

The degree by which U.S. equities trounced stocks in foreign markets last year was also glaring. In 2021, the S&P was up 28.7%, while emerging markets fell 2.5% and the Nikkei fell 4.5%.