While most investors believe another rate hike is on the way, DoubleLine Founder and CEO Jeffrey Gundlach is not one of them. During Yahoo Finance Invest, Gundlach told Executive Editor Brian Sozzi "I think the Fed has stopped raising interest rates, I don't think they're gonna do it again."

The uncertainty surrounding the Federal Reserve this year has caused ripple effects in the markets, raising concerns about just how all of this will end. Gundlach explained his biggest concern right now, saying, "What worries me the most is the concept of higher for longer." He explained that he does not think the Fed will cut rates in 2024, rather they will stay higher for longer, or "the economy will noticeably weaken, and they will do what they always do, and that is cut interest rates much more rapidly than they raised them."

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Video Transcript

JEFFREY GUNDLACH: We have a lot of major indicators that have been in recessionary signaling for a year plus. And so I think the Fed has stopped raising interest rates. I don't think we're going to do it again. That's clearly the message from the bond market. The thing that worries me the most is the concept of higher for longer, and not so much for the economy because once the economy starts to noticeably weaken, it seems like that's almost happening in real time, but once that happens, the Fed will cut interest rates.

The bond market's forecast has been at odds with the Fed's movements and the Fed's dot plots for much of this year. And now the bond market's internal pricing suggests that the Fed will cut rates 50 basis points or maybe 5/8 of 1% during 2024. I believe that's the one thing that is not going to happen. I think they'll either stay higher for longer, which is their rhetoric-- and hope they don't-- or the economy will noticeably weaken and they'll do what they always do and that is cut interest rates much more rapidly than they raise them.

I like to use the phrase the Fed takes the stairs up and the elevator down when it comes to interest rates. So the reason I'm worried about higher for longer is something that's already in evidence but isn't getting enough attention-- and that is our fiscal situation. The interest expense on the debt is exploding in a vertical fashion because all of those bonds that were issued back at 25 to 50 basis point interest rates or may be only as high as 1%, they're all rolling off, and they're rolling off with great speed.

So you'd have to reinvest those bonds that were paying almost nothing at an interest rate of, well, if the Fed funds rate is 5 and 3/8%, then that leads to a tremendous increase in interest expense of the debt. Already the interest expense since the Fed started raising interest rates has gone up by hundreds of billions of dollars, almost half a trillion dollars per year and it's going literally vertical.