The soaring U.S. deficit at a time interest rates are increasing may be setting the stage for a fiscal trouble, according to Jeffrey Gundlach, chief investment officer of DoubleLine Capital.

“Here we are doing something that almost seems like a suicide mission,” Gundlach said Tuesday in a webcast discussing his DoubleLine Total Return Bond Fund. “We are increasing the the size of the deficit while we’re raising interest rates.”

The Federal Reserve is expected to raise its benchmark rate for the second time this year and signal plans for future hikes when it meets Wednesday.

Meanwhile, the recent tax cuts and increased federal spending are setting up the U.S. deficit to balloon toward 125 percent of the gross domestic product after 2030, according to DoubleLine slides citing Congressional Budget Office projections.

“It’s pretty much unprecedented that we’re seeing this level debt expansion so late in an economic cycle,” Gundlach said.

Gundlach is also chief executive officer of Los Angeles-based DoubleLine Capital, which oversaw assets of about $119 billion as of March 31.

Among his other observations:

• The 10-year Treasury yield is still on track to climb to 6 percent by 2020 or 2021. For now, the lower rate on German 10-year debt is limiting increases in U.S. rates.
• Oil is likely to climb as high as $90 a barrel.
• There’s no recession likely in the next six to 12 months, but one is possible by 2020, which could make the next presidential election “a wild ride.”