The US economy is headed for a recession and a wave of company failures

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The US economy is headed for a recession and a wave of company failures, per Jeffrey Gundlach.Prepare for a recession and company failures as persistent inflation and high interest rates take their toll, Jeffrey Gundlach warned.The billionaire investor told Fox Business on Tuesday that the US economy will experience a prolonged downturn this year or next. Gundlach highlighted "quite concerning" recent data showing that most economic sectors are declining, while others are growing more slowly.The DoubleLine Capital founder and CEO also pointed to the hardships caused by inflation, which soared to over 9% in 2022 and remains well above the Federal Reserve's 2% target, and interest-rate hikes, which have surged from virtually zero to over 5%.Consumers have faced a "double whammy" of higher prices for essentials such as food, gas, and housing, while also owing more interest each month on their car loans, credit cards, mortgages, and other debts."All of these things are up tremendously, the things you have to buy," Gundlach said, citing car and homeowners' insurance as examples. "Those credit-card bills are really starting to add up."He warned that persistently higher rates could drive some companies to ruin and damage the wider economy."I think that higher for longer is going to lead to a recession," Gundlach said. "You're not going to take out Tesla necessarily — they might have other problems, but it's not going to be because of interest rates.""What you take out is the people, small businesses, medium businesses," he said, noting they'll run out of cash borrowing at 10% instead of 4%.Gundlach said the softening economic data has increased the probability of two Fed rate cuts this year, but he doesn't expect that to stave off a recession.It's worth noting that the veteran fund manager has been sounding the recession alarm for more than two years.He predicted last fall that a downturn would occur in the first half of this year, which now seems unlikely. Yet, Gundlach is one of several experts who see cracks forming in the economy.