Doubleline Capital's Jeffrey Gundlach said on CNBC that he expects a U.S. recession will start in a few months, and that the Federal Reserve will need to respond "very dramatically."
"The economic headwinds are building, we've been talking about this for a while, and I think the recession is here in a few months," Gundlach said Monday. "All we really need is the unemployment rate to go higher."
The Doubleline Capital founder also said he anticipates the Fed will cut interest rates "a couple of times" this year. The overall state of the economy is "clearly weak," he said.
On Monday, amid a more upbeat outlook for U.S. banks, Treasury yields jumped and swaps traders were betting that a quarter-point rate hike is more likely than not at the central bank's next meeting in May.
Officials have been tightening policy for a year to battle inflation.
Gundlach said he doesn't expect the Fed will lift rates until the 2-year Treasury yield "goes back up," although he didn't specify by how much.
