Skip to content
The Fed’s Battle Against Inflation to Worsen Market Turmoil: Canaccord’s Dwyer

Stocks may enter a deeper freefall.

Canaccord Genuity’s Tony Dwyer predicts that the interest rate hikes of the 1980s will exacerbate the turmoil and make a recession more and more likely.

“Generally, I’ve been optimistic over the years. But there’s a problem with money availability,” the company’s chief market strategist told CNBC’s “Fast Money” on Monday. “At the end of the day, you have to have money to buy stuff, do stuff, and invest in stuff. And, the possibilities of money availability have largely closed since the start of the year.”

In a note released this week, Dwyer warns that the Federal Reserve is “under significant pressure” to reduce inflation by suppressing demand. He argues that the economy is on the cusp of rate spikes reminiscent of Paul Volcker’s tenure as Fed Chairman.

“The debt-to-GDP ratio during the Volcker era was at a generational low,” Dwyer said. “So debt to GDP was nowhere near the problem it is today. We’re generationally high at 138% debt to GDP. So if you’re going to take a leveraged economy and shutting it down is not good.”

On Monday, the S&P 500 lost 4% and closed in bearish territory. The tech-heavy Nasdaq fell 5% and the Dow lost 876 points, its first close over 600 points three days in a row.

cnbc Business

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.