Guggenheim investment chief predicts there’s a 50% chance the Fed cuts rates next year

FAN Editor

There’s a 50 percent chance that the Federal Reserve reverses strategy and instead cuts interest rates next year, Guggenheim’s head of investing told CNBC on Wednesday.

“Historically … when we’ve had this kind of a pullback in stocks, the Federal Reserve reacts — they at least pause,” Scott Minerd said on “Fast Money Halftime Report.” “About half of the time they go on and do a rate cut.”

“We’re close enough to a bottom that investors should be stepping in,” he added.

Minerd, who in April predicted a recession is looming and said stocks would fall 40 percent, pointed to the crash of 1987 and the Asian financial crisis of 1997 as precedents for where the market presented opportunities to “step up and buy.” The major indexes are working to stage a comeback after experiencing their worst December since the Great Depression.

The Dow Jones Industrial Average was up more than 500 points at one juncture Wednesday after suffering its worst Christmas Eve ever Monday.

“I would be looking to selectively pick up some, what I think, some cheap assets that are out there because I think inevitably the Fed’s going to have to react to this,” he said.

The Fed last week raised interest rates for a fourth time this year, as expected, and lowered its rate hike projection for 2019 from three to two.

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