Late Tuesday, the 10-year yield stood at nearly 2.38 percent.
In his first investor webcast this year, Gundlach said after the recent huge run-up in U.S. stock markets, investors should look to "peel off" their exposure to equities. Gundlach, known on Wall Street as the 'Bond King', said he expects markets to reverse their post-election moves.
About interest rate hikes by the Federal Reserve this year, Gundlach said: "All things being equal, the Fed will hike in June." He expects two hikes this year with three possible.