Too many Fed cuts could cause stocks to outrun economy, warns money manager of $140 billion
partner, tends to go with the market consensus, saying that Powell was "relatively clear that this was an insurance cut."
"You don't buy insurance once," Novogratz told CNBC in a later interview. "The last four cycles were at least three cuts. I'd expect at least three cuts. They are going to cut again next month." "You have a decent U.S. economy. You're throwing fuel on it. You could see the stocks go higher," concluded Novogratz, founder of cryptocurrency focused firm, Galaxy Digital.
Critics of the Fed's policy of holding rates at historically, near-zero levels for too long after the 2008 financial crisis argue that stocks were, and maybe still, are being artificially pushed higher. Investors were forced to take risks they might not have otherwise because there was no real alternative to the market.
"I think we're long in the cycle," cautioned Novogratz. "This could be the last leg of this giant, decade-long liquidity driven rally. When you really step back, the macro is dangerous and you're going to surf this last leg of the rally."Get this delivered to your inbox, and more info about about our products and services.
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