Jeffrey Gundlach, chief executive officer of DoubleLine Capital, said on Wednesday he expected a short-term rally in U.S. Treasuries and that investors should "use the strength" in U.S. stocks to take profits and diversify in overseas markets.
"I am surprised with the relentless nature" of equities after the election of U.S. President Donald Trump, Gundlach told CNBC.
Gundlach, who oversees more than $101 billion in assets at Los Angeles-based DoubleLine, said he continued to short the shares of Chipotle Mexican Grill Inc. although he lost a lot of money at the beginning of his trade.
On the Fed, Gundlach said the influence of central bank officials has greatly increased.
The Federal Reserve raised rates Wednesday for the first time this year and only the third time in a decade.
"The market is really getting kind of old-school, where the market believes what the Fed says," said Gundlach, who is widely known on Wall Street as the Bond King.
"So what's really important today isn't the interest-rate increase, which we all know is going to happen - but it's what happens with the Fed's rhetoric," he said.
"Don't see a recession coming at all. Back last summer, there was some dicey-looking stuff," he said. "All that changed with the election."
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