Niles predicts the rally will end once the Fed approaches a 6% interest rate.
Dan Niles, founder of the Satori Fund, has speculated that the Federal Reserve might bring interest rates closer to 6%. So, he warned that investors who were counting on a steady rise in the market would be let down.
As Niles put it on CNBC’s “Tech Check,” “I think the Fed, quite honestly, is going to get up to 6% before they stop hiking.”
When the Fed last met earlier this month, they increased interest rates by 25 basis points. As a result, the desired range for interest rates is now 4.5–4.75%.
- Advertisement -
When the Federal Reserve will cease increasing interest rates has been a topic of debate among market watchers and players. So far this year, positioning has been heavily influenced by those forecasts.
Meanwhile, investors have looked past a pessimistic 2022, leading to a market rally since the new year began. Since the beginning of the year, the Nasdaq Composite has gained 14.5% as investors have become more enthusiastic about growth stocks in the hopes that the Fed will reverse course on its interest rate increase campaign.
Niles, though, warned that the second half of the year may see the rise fizzle out as investors learn to be more cautious.
He opined that the second half of the year would be necessary to debunk many of the theories that had guided the market in the first.