"To raise interest rates when junk bonds are nearly at a four-year low is a bad idea," Gundlach said in a telephone interview.

Gundlach, widely followed for his investment calls, said if the Fed begins raising interest rates in September, "it opens the lid on Pandora's Box of a tightening cycle." An interest rate hike next month would be the first in nearly a decade, ending a historic era of monetary policy.

"What happens if the next data report that comes out is unchanged or stronger than the previous one, then talk of another hike gets louder," he said.

"The Fed historically starts something and they continue on with it as long as the situation stays largely similar. If you start raising rates after such a long period of zero-bound rates, it is a different regime."

The SPDR Barclays High Yield Bond ETF hit 37.12 on Tuesday, compared with 35.34 on Oct. 4, 2011. Gundlach said DoubleLine sold out some of its junk-bond positions in June and purchased investment-grade corporate credits.

Last year, Gundlach correctly predicted that Treasury yields would fall, not rise as many others had forecast, because inflationary pressures were non-existent and technical factors, including aging demographics, were at play.

Gundlach said the selling pressure in copper and commodity prices driven by worries over China's growth outlook "should be a huge concern. It is the second-biggest economy in the world.

"The global economy is weak," he said. "It just seems to me that things aren't exactly fine."

Copper prices slid to a six-year low below the psychological $5,000-a-tonne level.

"You get much more downside in commodities and it could really spiral," he said. While Gundlach does not believe the global economy is in a deflationary environment, "the problem is that people give it a zero probability."

The Los Angeles-based DoubleLine Capital had $76 billion in assets under management as of June 30.

The DoubleLine Total Return Bond Fund, DoubleLine's largest portfolio by assets and run by Gundlach, had positive inflows in July. The Total Return fund attracted a net inflow of $390.4 million, the 18th consecutive month it has attracted new money. It has $47.2 billion in assets and invests primarily in mortgage-backed securities.