NEW YORK (Reuters) - Jeffrey Gundlach, chief executive of DoubleLine Capital, said on Friday he expects the yield on the benchmark 10-year U.S. Treasury note to drop below 2.25 percent as global investors seek safety.

Jeffrey Gundlach, Chief Executive Officer, DoubleLine Capital LP., speaks at the Sohn Investment Conference in New York City, U.S. May 4, 2016. REUTERS/Brendan McDermid

“There is a stealth flight to safety going on. German bond yields are leading the way down,” Gundlach said in emailed comments. “Gold is rising. Speculators remain massively short bonds and the market is going to squeeze them out.”

Late on Friday, the yield on the 10-year note US10YT=RR was near 2.32 percent, compared with 2.388 percent late on Thursday. Yields fell as low as 2.313 percent, the lowest since Jan. 17.

Gundlach, who oversees $101 billion, first introduced his view on the 10-year yield’s bottom in January. He then said on an investor webcast: “I think the 10-year Treasury will go below 2.25 percent ... not below 2 percent” before edging up again.

Gundlach said with the recent rally in the bond market, the U.S. Treasury should consider issuing ultra-long-term obligations.

“I’d issue the longest maturity Treasuries that the market accepts,” Gundlach said. “Start with 40-year, then keep extending if the market allows it. Do 100 if you can get there. The timing is good right now.”

Wall Street diverged from the bond market and edged higher on Friday, with the Dow extending its streak of record-setting gains to 11 days. [.N/C]

Gundlach noted: “Stocks are out of synch with the stealth flight to safety. Lots of hope built in.”

Gundlach, known on Wall Street as the ‘Bond King’, said in December: “The bar was so low on Trump to the point people were expecting markets will go down 80 percent and global depression - and now this guy is the Wizard of Oz and so expectations are high. There’s no magic here.”

DoubleLine Total Return Fund, the Los Angeles-based firm’s flagship fund with $54.7 billion in assets, has trailed its peer category so far this year.

According to Morningstar data on Friday, DoubleLine Total has posted year-to-date returns of 0.70 percent, lagging 73 percent of its peer category.

On a three-year basis, however, DoubleLine Total Return Fund has posted returns of 3.67 percent, easily surpassing 92 percent of its peer category, according to Morningstar.