What in the world is going on?

Something happened in the middle of May," said investing god Jeff Gundlach as he began his latest webcast on the state of the global markets and the economy.

He was referring to how global interest rates quietly rallied and how the Japanese stock market fell spectacularly.

He notes that the magnitude of the interest rate rally isn't unusual.  Having said that, Gundlach believes rates will stay low thanks to a "put" by the Federal Reserve. Should rates rise, Gundlach believes the Fed would actually expand quantitative easing. This is because high interest rates would put too much pressure on the economy, and it would cause Federal interest expenses to become too onerous.