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Fed’s inflation battle to worsen market turmoil: Canaccord’s Dwyer

Fed's inflation battle to worsen market turmoil: Canaccord's Dwyer

Shares might go right into a deeper tailspin.

Canaccord Genuity’s Tony Dwyer predicts Eighties-era rate of interest hikes will exacerbate the turmoil and make a recession appear more and more extra probably.

“Typically, I’ve been bullish over the years. But there’s a money availability problem,” the agency’s chief market strategist advised CNBC’s “Fast Money” on Monday. “Ultimately, you have to have money to buy stuff, to do stuff and to invest in stuff. And, the avenues for money availability have largely closed down since the beginning of the year.”

In a observe out this week, Dwyer warns the Federal Reserve is “under significant pressure” to minimize inflation by clamping down on demand. He contends the financial system is on the cusp of fee spikes paying homage to Paul Volcker’s tenure as Fed chair.

“Debt-to-GDP in the Volcker era was at a generational low,” mentioned Dwyer. “So, debt to GDP wasn’t anywhere near the issue it is today. We’re at generational high at 138% debt to-GDP. So, if you’re going to take a levered economy and shut it down, that’s not good.”

On Monday, the S&P 500 misplaced 4% and closed in bear market territory. The tech-heavy Nasdaq fell 5% and the Dow dropped 876 factors, its first time ever closing personal 600-plus factors three days in a row.

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