CEO of DoubleLine Capital Jeffrey Gundlach said Thursday that interest rates could rise if Republicans end up controlling the House, ensuring a trifecta of government that gives President-elect Donald Trump carte blanche to spend as he pleases.

Gundlach, a noted bond investor whose firm manages more than $96 billion, believes that increased government spending would require more borrowing through Treasury issues, putting upward pressure on bond yields.

“If the House turns to the Republicans, there will be a lot of debt, there will be higher interest rates in the long term, and it will be interesting to see how the Fed responds to that,” Gundlach said on CNBC .Closing bell“.

The race for control of the House is undecided Thursday after Republicans secured their new majority in the Senate. The Federal Reserve cut rates on Thursday and traders expect it to do so again in December and again in 2025.

Notable investors like Gundlach have expressed concerns about the difficult budget situation. The 2024 financial year has just ended with the government establishing a budget deficit above $1.8 trillionincluding more than $1.1 trillion dedicated solely to paying the financing costs of the $36 trillion U.S. debt.

“Trump says he’s going to cut taxes … he’s very procyclical on stimulus,” Gundlach said. “So it seems to me that there will be some pressure on interest rates, particularly in the long term. I think the outcome of this election will have very important consequences.”

If the Trump administration extends the 2017 tax cuts or introduces new cuts, it could add significantly to the nation’s debt in the coming years, worsening an already difficult budget situation.

Gundlach, who had called for a recession in the United States, nevertheless said the Trump presidency made such an economic downturn less likely.

“I think it’s fair to view Trump’s victory as a pretty substantial reduction in near-term recession risks,” Gundlach said. “Certainly, the chances of a recession diminish when this type of program is promoted in plain language over the past three months by Mr. Trump.”