The founder and CEO of investment firm DoubleLine Capital Jeffrey Gundlach is leaning bearish on the US stock market amid the imposition of import tariffs as high as 50% by the world’s largest economy.

In a new CNBC interview, Gundlach says he sees the S&P 500 stock index falling by around 14% from the current level.

“So I think investors need to stay on defensive mode. We certainly are positioned for that. And the extent to which investors hold cash, I would continue to do that until we get something more of a sustained bottom. As I said earlier, I’m looking for 4,500 on the S&P [500 index].”

According to the billionaire investor who earned the nickname “Bond King” due to his success in the bond market after the 2008 financial crisis, the market uncertainty caused by the imposition of import tariffs in the US is going to persist for the foreseeable future as a quick resolution is unlikely.

“People talked about tariffs [getting] delayed. There is no way that’s going to happen. I think [US President Donald] Trump is going to keep this going.

And I don’t understand exactly how he calculates or the administration calculates this strange formula to set these tariffs. It just doesn’t seem to make much sense to me mathematically. But at least it’s a formula. Whether it’s logical or not, it’s a formula. Otherwise, it’s just going to be totally arbitrary.

But he’s [Trump] keeping people guessing. And he’s not going to back down. I don’t think so. So this is something that’s going to have to play out and we’re going to be dealing with this, I would say certainly for weeks or months and not just days.”

The S&P 500 index is trading at 5,222 at time of writing, down by over 10% since the start of the year.

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