Gundlach: Fed may have jumped the gun on 'mission accomplished'

The Federal Reserve may have just had a "mission accomplished" mistake, according to one market expert.

DoubleLine Capital's Jeffrey Gundlach said the Fed's Wednesday announcement of the first rate hike since 2006 has been "a long time in the making," but it could come back to haunt Chair Janet Yellen.

Reiterating his earlier comments that the central bank's hike was more about credibility than economics, Gundlach pointed to Yellen's afternoon news conference comments.

"She says 'the era of extraordinary accommodation has ended,' which of course is not true at all," he said, adding that a target funds rate between 0.25 percent and 0.5 percent is still extremely accommodative. "I'm reminded of George W. Bush on the aircraft carrier with 'mission accomplished.' I think Janet may have jumped the gun on mission accomplished."

In fact, Gundlach predicted that market watchers will be talking about the Fed more than ever — "this is not the endpoint in the journey," he added.

As for market reactions, the bond expert predicted that the dollar would not see a significant rally. He said he was watching to see if the dollar index could mark two closes above its 100.33 March high.

He also suggested that traders keep an eye on the five-year Treasury, which has "humongous" yield resistance around 1.81. If it is able to break through that level, he said, "it's going to go up a lot; it might go up to 2.40."

In an earlier Wednesday interview before the Fed announced the rate hike, Gundlach told CNBC, "it's clear to me that they're raising rates for philosophic reasons, to deliver on their promise."

Gundlach had warned in September that markets were not ready for a Fed hike at that time.

"What's fascinating about all this is one of the reasons the Fed gave for demurring about raising interest rates back in September was global financial conditions," he said before the statement release. "It's fascinating how global market conditions are worse in most places than they were in the middle of September."

The market expert pointed to junk bonds, bank loans, emerging-market equities, commodity prices and emerging-market debt as areas that are all down from their September positions.

"What's the purpose of raising rates today with all of these indicators weaker than they were three months ago — and you gave the reason for not raising rates primarily that these indicators were weaker?" he asked. "So, I think the Fed is raising rates because they promised they would in 2015, and they just can't do it one more time: To just fail to deliver on the type of rhetoric that they've given while maintaining credibility."