"There's a bet going on in the market, you can see it as volatility. In fact, it may be significantly higher than 4%," he said, predicting the Fed will likely raise at least 75 basis points, most likely a full percentage point. He is not alone in that prediction,"That level of uncertainty in terms of terminal rates, where the Fed will stop raising, is now officially an unknown. And so that's extremely problematic for the markets," said the venture capitalist.
CPI, which tracks a broad basket of goods and services, increased 0.1% for the month, and 8.3% compared to a year ago. Excluding volatile energy and food costs, August CPI rose 0.6% from the previous month, and 6.3% year-on-year.O'Leary said the bulk of the economy is still robust, and the Fed will continue to raise rates until they see"some kind of slowdown."
The food index jumped 0.8% in August and shelter costs, which make up about one-third of the weighting in the CPI, hiked 0.7%. Energy prices fell 5% for the month, but the declines were offset by the aforementioned increases. "Nothing else [aside from gasoline prices] slowed down… Everything else continued to rise. And so we're in a very difficult situation here," he said.