GUNDLACH: Treasury yields are going higher
The carnage was been worst in German bunds.
The yield on the 10-year bund, which rises when its price falls, spiked to as high as 0.8%.
Bonds all across Europe sold off, while US treasuries followed, with the benchmark 10-year note's yield rose to around 2.36% and broke its highs of 2015.
In an interview with CNBC on Wednesday, DoubleLine Capital's Jeff Gundlach said the move higher in European yields have been the anchor for US treasuries.
With rock bottom, sometimes negative yields in Europe, investors bought US bonds instead in the hunt for higher yield.
And with European yields now spiking, Gundlach says US yields are headed higher:
"It was a relative value argument. You look at the chart on the 10-year bund - it's something to see. It's really, really a breakout. You look at Spain - Spanish yields, Italian yields - trend line breaks. One chart that looks absolutely like no other direction its headed is the bund, and that direction is: The yield is going higher. So it's going to be hard for US rates to settle down. Although we don't expect much higher rates in the US, we still think they're going higher."
Since the Federal Reserve ended its quantitative easing program last year, investors have had a hit and miss forecasting when treasury yields would begin to move convincingly higher.
Gundlach also forecast that the Fed will wait until 2016 to raise rates.