(Bloomberg) -- Prominent fixed-income manager Jeffrey Gundlach said investors trying to figure out how the interest-rate situation will play out should pay attention to the bond market rather than the Federal Reserve.

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“My 40 plus years of experience in finance strongly recommends that investors should look at what the market says over what the Fed says,” the DoubleLine Capital LP Chief Investment Officer told listeners on a webcast Tuesday.

A number of Fed officials have indicated that they expect to lift their policy target — currently a range of 4.25% to 4.5% — to more than 5% and keep it there for some time. But markets appear much more skeptical. Swaps are currently pricing in a peak of less than 5% and suggest that policy makers will in fact begin cutting again before the year is out as US recessionary pressures bite.

Treasury yields have tumbled in the wake of recent data showing a moderation in US wage gains and a contraction in the services sector. Far from pricing in a benchmark above 5%, Treasury yields across the curve are trading below the Fed’s current range, with even the two-year note ending just shy of 4.25% on Tuesday.

He also drew attention to the inversion of the Treasury yield curve, which have successfully predicted economic slumps in the past. Inverted yield curves have always led to recession in relatively short order, he said, adding that “there is tremendous upside in many bond strategies.”

Bonds are more attractive than equities, according to Gundlach. That is reflected in his view that investors right now should favor a portfolio that is 60% bonds and 40% equities, rather than the opposite, more traditional 60/40 mix that allocates the bigger share to stocks.

Gundlach’s comments on the Fed echo remarks he made late last week on Twitter in which he said “There is no way the Fed is going to 5%. The Fed is not in control. The Bond Market is in control.”

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