The banking crisis will only end once the Fed starts slashing interest rates, Jeff Gundlach warns

• Regional banks will be under threat until the Federal Reserve cuts interest rates, according to Jeff Gundlach.
• "Deposits are going to keep drifting out" until that happens, the billionaire bond investor said Wednesday.
• Gundlach's comments came as California lender PacWest's share price plunged 50% on news it's exploring a sale.

The turmoil rocking the US regional banking sector won't end until the Federal Reserve starts slashing interest rates, according to billionaire bond investor Jeff Gundlach.

The DoubleLine Capital CEO said Wednesday that customers will likely carry on pulling their deposits from smaller lenders until benchmark borrowing costs start to fall from their current level of around 5%.