Inflation is falling fast enough for the U.S. Federal Reserve to cut rates this year, which will help the stock market, said Tom Lee, the founder and head of research at Fundstrat Global Advisors.
In a new CNBC interview, Lee says there are “a lot of reasons” to believe the current stock market rally will continue.
“Part of that is we think the inflation trajectory is at a lower level than the consensus expects. The second is that I think there is too much caution. You know, if you look at prime brokerage lending, or basically leverage in the market, it’s still below October 2021 levels.
There’s still $6 trillion in cash sitting on the sidelines, and in our conversations with customers, they’re still quite cautious. So as long as investors are top-calling and really looking at the world half empty, I think stocks can still rise on this wall of worry.”
Lee is also a vocal crypto bull. About a month ago, Fundstrat’s CEO predicted that Bitcoin (BTC) could rise above $150,000 in the next 12 to 18 months.
“We have more visible demand from the spot exchange-traded fund (ETF) and we know that supply dynamics are improving with the halving coming up, which will take place in less than a month.
It does help that the Federal Reserve becomes more easing, which makes monetary policy easier.
And I think from a regulatory perspective, we’ve dropped so many hammers in the last twelve months, eighteen months actually, that unless things get worse in the next year or two, Bitcoin is already facing some sort of regulatory peak had.”
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