Speaking at DoubleLine's annual investor event at the New York Yacht Club, the influential bond investor also cautioned investors to steer clear of high-yield, or junk, bonds when rates begin to rise.

"Get out of high-yield bonds and buy Treasuries" when the Fed starts pushing rates up, he said. "Worked in every single Fed rate hike in history."

Gundlach repeated that the long end of the Treasury yield curve is like a line from actor Clint Eastwood in the Dirty Harry films: "Go ahead, make my day. Raise short-term interest rates."

If the Fed raises short-term interest rates, he said, all policymakers are going to do is import deflation.

Gundlach said the bond market thinks the economy is too weak to hold up under Fed tightening. As a result, if the Fed goes ahead, Gundlach believes long-duration securities such as the 30-year Treasury bond would rally in price and their yields would fall.

DoubleLine is based in Los Angeles, and had $73 billion in assets under management as of March 31.

It has attracted net inflows of money for 15 straight months, becoming one of the prime beneficiaries of outflows afflicting Allianz SE's Pacific Investment Management Co, which prominent bond investor Bill Gross left in September.

Last year, Gundlach correctly forecast that U.S. Treasury yields would fall, rather than rise as many expected, because inflationary pressures were nonexistent and technical factors such as aging demographics were at play.

(Reporting by Jennifer Ablan; Editing by David Gregorio and Andre Grenon)

By Jennifer Ablan