This stock market strategist says the coming recession could be the biggest ever. ‘I recommend prayer.’

Keith McCullough, founder and CEO of Hedgeye Risk Management, isn’t one to mince words about financial markets, the Federal Reserve or the economy.

Right now he has a few less-than-charitable things to say about how the Fed’s rate hikes have ground up stock and bond investors.

His investment-research firm’s economic models turned bearish on stocks and bonds at the beginning of 2022. Prices have since tumbled, but McCullough is still bearish. He’s now steering investors to defensive positions primarily in cash, the U.S. dollar, gold and income-producing equities.

McCullough is preparing investors for the painful recession he expects for both Wall Street and Main Street in 2023. To anyone expecting the Fed to realize its rate increases have been excessive and rescue the markets, McCullough is blunt: “There’s no dovish pivot,” he says.

Even if the Fed were to relent, McCullough says the damage is done. “They’re far too late,” he says of the Fed. “Just like it was impossible for them to stop inflation, it’s impossible for them to stop the pending U.S. corporate profit recession or the mainline recession.”

In this recent interview, which has been edited for length and clarity, McCullough outlines his base case for the U.S. economy and the financial markets going into 2023, and advises investors to take shelter from a coming storm many of them have never seen.


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