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The Fed has never hiked rates during a recession, expect stock markets to fall another 50% – Todd ‘Bubba’ Horwitz

Kitco News

The Federal Reserve has no room to pivot and reduce rates, and this is why they are raising rates during this recession, said Todd ‘Bubba’ Horwitz, Chief Strategist at

First and second quarter U.S. real GDP in 2022 were negative. This indicates a technical recession, which is two consecutive quarters of GDP decline.

“[The Fed] is raising rates during a recession,” said Horwitz. “It’s never been done in history… There is a political agenda behind all of this stuff that’s going on, which is to try to create The Great Reset.”

The Great Reset is a World Economic Forum plan to implement stakeholder-based governance and green energy infrastructure. Opponents of the Great Reset claim that it is a guise to transfer assets from the middle class to the wealthy.

“The [Biden] administration is looking to get the Great Reset,” said Horwitz. “There is going to be no middle class left.”

Horwitz spoke with David Lin, Anchor and Producer at Kitco News.

Jackson Hole

Horwitz’s comments come after Fed Chairman Jerome Powell’s speech at the Jackson Hole Symposium in Wyoming. Powell’s hawkish tone was evident, with the Fed Chairman saying, that the Fed was taking “forceful and rapid steps” to reduce inflation.

“His remarks are those of an idiot,” said Horwitz. “They should have been raising rates all along, going back to 2013… [Powell] said [last year] that inflation was transitory, which everybody in the world knew was a bunch of garbage.”

The Federal Open Market Committee is next meeting in September, and Horwitz said that they will raise rates by “1 percent,” but he said that the Fed will fail to tame inflation.

“[Powell] is trying to get away from what’s going to happen, which is going to be hyperinflation,” Horwitz explained. “Wait until the price of oil starts skyrocketing again. What do you think is going to happen to inflation then? We’re going to have a food shortage this year. We’re going to have food riots in many countries.”

According to the Food and Agriculture Organization, food prices remain elevated compared to 2021, although they peaked in May of 2022. Climatic events, like drought across Europe, may force food prices upward.

Stocks to crash

The S&P 500 has fallen by 15 percent over the year. Horwitz suggested that equities are experiencing a bear market, and that stocks would continue their downward trend.

“Overall, I expect to see a 50 to 60 percent haircut in these markets,” he said. “If anybody looks at their own finances, they can certainly see that it’s recessionary times and they’re watching their spending.”

However, Horwitz stated that there are opportunities for investors in this market.

“If you were just trying to trade the market, I’d be buying commodities,” he said. “If I were investing, I have no problem that equities are soft. I’d be looking for some value plays there.”

To find out Horwitz’s prediction for the gold price, watch the video above

Follow David Lin on Twitter: @davidlin_TV (

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