Billionaire money manager Jeffrey Gundlach of DoubleLine Capital predicts that U.S. inflation could reach up to 10% this year, reiterating the need for the Fed to act aggressively, reports an article in Bloomberg. The comments were made during a web presentation in which Gundlach said the Fed’s job is “to fight inflation” and that they had “done a terrible job of it so far.”

The Fed will raise interest rates by a quarter of a point in March, Gundlach expects, and foresees the CPI climbing to at least 9% before it peaks. Surging prices will eat up the food and energy allocations in household budgets, and that could lead to “demand destruction” and result in inflation remaining as high as 7.5% by the end of the year. Gundlach’s outlook was decidedly pessimistic, calling the economy “substantially worse” than it was in September and pointing to an “insanely high” budget deficit, the article details.

Gundlach’s advice to investors is to sell off U.S. equities and purchase emerging-market stocks in their place, which are inexpensive at the moment due to the collapse of the Russian market. He also said bonds look extremely over-valued while commodities in general are a better investment than gold, which may do well for long-term investors but not for short-term bets. Gundlach also predicts the dollar will weaken under trade and budget deficits, bringing an end to the outperformance of U.S. stocks and herald a possible recession. Housing, meanwhile, is doing quite well thanks to wage growth that’s higher than the 30-year fixed-rate mortgage, the article concludes.