'Cracks Are Forming' And The Fed Won't Stop Raising Rates Until Something 'Breaks,' Asset Manager Scott Minerd Warns

Guggenheim Partners CIO Scott Minerd told CNBC’s audience Thursday that the Federal Reserve will not stop raising interest rates until “something breaks.”

What Happened: Minerd also said to get ready for the Fed to pivot, possibly as soon as November, because from where he stands “cracks are forming.” 

While his comments and the Fed raising rates are certainly not bullish, Minerd sounded convinced that the capitulation point is coming sooner than some think. 

But, after this morning’s strong jobs report, it looked increasingly likely the Fed will stay the course. 

See Also: US Adds 263,000 Jobs In September As Labor Market Tightens: How Will The Fed Respond?

Many users on Twitter, including RealMoney.com’s Helen Meisler, thought Minerd’s comments sounded much more bullish than just a few weeks prior.  

I am so confused.

I thought Minerd was bearish.

Now he sounds bullish.

— Helene Meisler (@hmeisler) October 6, 2022

Minerd told the CNBC audience on Sept. 7 that he thought there will be a 20% correction in the S&P 500 by mid-October. Since then, the market was down about 10%. 

Why It Matters: Many had fears about "something breaking" heading into the week as speculation rose about Credit Suisse Group AG's CS financial health. In the following days, Credit Suisse executives have somewhat eased fears and the stock is up more than 14% as of Friday afternoon.

See Also: Credit Suisse Floats Plan For $3B Debt Buyback To Reassure Investors

Minerd has put himself in a good position: if the Fed pivots soon, his prediction from yesterday will come true. If it doesn't, his 20% correction call from early September will appear prescient.

Guggenheim Partners has more than $300 billion in assets under management according to its website. 

Photo: wan wei via Shutterstock