DoubleLine Capital CEO Jeffrey Gundlach said Wednesday the Federal Reserve is more likely to raise rates again in light of the recent jump in oil prices. “I think the probability of rate hikes is higher than what I thought before this oil spike happened,” Gundlach said on CNBC’s “Closing Bell. ” “The oil spike is really going to be problematic.” Oil prices have jumped since July, with West Texas Intermediate crude topping $90 a barrel, as expectations of tighter supplies grew. Rising oil prices are already translating into higher gasoline prices at a time when the economy is trying to stave off a recession and the Fed is fighting inflation. @CL.1 3M mountain West Texas crude past three months “We already know that the base effects, the roll-off of the CPI, is going to lead to very likely inflation going back up to … maybe even going to a four handle on headline CPI before it comes down with that shelter component effect,” Gundlach said, referring to core inflation above 4% rather than 3%. “So I think the chance of a rate hike is higher because these oil prices are going to be a real problem.” So-called headline inflation, measured by the consumer price index, posted its biggest monthly increase this year in August as energy prices fed much of the gain, rising 5.6%, an increase that included a 10.6% surge in gasoline. The Fed kept interest rates unchanged Wednesday but forecast it will hike one more time this year. The rate-setting Federal Open Market Committee projected two rate cuts in 2024, two fewer than its forecast in June. Gundlach said he expects the Fed to cut rates in the first half of 2024 and the reduction could be bigger than the central bank is projecting. “I think it’s quite likely there’s going to be rate cuts in the first half of next year. And I think they’re going to be bigger than the Fed thinks, as their base case,” Gundlach said.