U.S. corporate bonds are by far the most dangerous part of the bond market and more than half of triple-B-rated debt would have a below-investment-grade rating based on leverage alone, Jeffrey Gundlach, chief executive officer of DoubleLine Capital, warned on an investor webcast on Tuesday.

Gundlach said investment-grade corporates got to the most overvalued levels in the history of the U.S. bond market last September and have since been underperforming the broad bond market against the rising-rate environment, Reuters reported.

In recent weeks, corporate bond funds have been posting cash withdrawals with the four-week moving average at $341 million, Lipper said.

“A lot of sectors look rich but the one that looks by far the worst - and is the worst - are corporate bonds,” said Gundlach, who oversees more than $123 billion in assets. “Ultimately, should a recession ever arrive, junk bonds will be particularly dangerous.”

The U.S. corporate economy is weighed down by “a lot of leverage” as well as ongoing deterioration in the credit quality of the investment-grade market, he said.

Gundlach said the U.S. corporate bond market is at its most vulnerable point to date and a wave of rating downgrades would be hard for the market to absorb. “If rates rise, you aren’t going to be very happy,” he said about further total return losses.

Gundlach said there are bear markets in homebuilders, autos and banks. “We’re starting to see a real decline in home prices from the major areas. That’s going to be a growing narrative because of the lack of deductibility for property taxes and state taxes in many of the high-cost areas. In many areas, inventories of homes are piling up. It’s really going up at a real rapid rate.”

Gundlach again raised red flags on the “suicide mission” the Federal Reserve has taken on with exploding deficits. Gundlach, who voted for President Donald Trump, said the driver of U.S. economic growth is deficit spending and borrowing from the future. “It is very bad that the deficit is rising” late in this economic cycle, he said.