In a webcast last month, DoubleLine Capital co-founder Jeffrey Gundlach warned investors that too much stimulus could backfire, citing how the U.S. deficit has grown along with S&P returns. This according to an article in Advisor Perspectives.

While tax cuts, deficits and debt have been responsible for the growth in the U.S. economy and stock market, says Gundlach, it remains to be seen what will happen now that the Fed is in tightening mode. “We’ll see what happens as $60 billion/month of debt is retired, starting in October,” he says, adding that there are also trillions of corporate maturities in the next five years both in the U.S. and across the globe.

“It’s bad enough that deficits are increasing this late in the cycle, but we are decreasing taxes and raising interest rates,” Gundlach says, describing the situation as a “suicide mission.” As rates increase, he explains, the additional interest costs will add even more pressure to the deficit and create a “self-reinforcing cycle of higher debt and higher rates.”

Gundlach offers an overview of the financial markets, noting that he is not a fan of corporate bonds because they’re a bit “rich”—his favored bond sectors are non-agency mortgage-backed securities and floating rate bonds. He advises investors to be globally diversified, adding that the U.S. market is sensitive to a small percentage of stocks. “I would not invest in e-commerce stocks,” he said.