As the Fed prepares to raise interest rates several times this year and shrink its $9tn balance sheet, some fund managers say they are concerned that risky assets will struggle to maintain the momentum of previous years. Federal Reserve Chairman Jerome Powell said Thursday that the Fed is likely to raise interest rates by 50 basis points at its May meeting.

"in my opinion, it is appropriate to speed up the pace of raising interest rates," Powell said. I think the meeting in May will discuss interest rates of 50 basis points. Powell's statement was largely in line with market expectations that the Fed would change its previous practice of raising interest rates by 25 basis points and take faster steps to curb inflation.

However, as Mr Powell says, the market has become more aggressive in pricing higher interest rates. Expectations for a 50 basis point rate hike in May rose to 97.6 per cent, according to CME Group Inc Group's Federal Watch tool (federwatch Tool). Traders also expect another rate hike before the end of the year, when the federal funds rate rises to 2.75%. The federal funds rate is the overnight bank lending rate, but it is also linked to many consumer debt instruments.

Us stocks also closed lower on Thursday, with the Dow Jones industrial average down more than 300 points and the interest-rate-sensitive technology stock NASDAQ down more than 2 per cent. Treasury yields rose, with the benchmark 10-year Treasury yield at 2.9 per cent.

Keith McCullough, founder and chief executive of hedge risk Management (Hedgeye Risk Management), said the Fed waited to raise interest rates because inflation was "short-lived" and then tightened monetary policy led directly to the economic slowdown. "the Fed always screws up," he said. "their policies are too tight, too late. "

He points out that at the peak of the inflation cycle, what everyone sees is focused on the persistence of inflation. "We think that, overall, inflation will peak between now and the end of the second quarter, and then continue to cool down. If the Fed continues to raise interest rates six to seven times, they will reverse the yield curve and real economic growth in the United States will face the threat of recession. I am more concerned with the expectation of a recession and its impact on consumer spending than with the actual prediction of a recession. The yield curve already reflects expectations of recession. "

Mr McCullough said the US economic slowdown would enter "four stages", with year-on-year growth and inflation starting to slow at the same time. McCullough's forecast is that earnings growth in US stocks will slow sharply this year because of a simultaneous slowdown in US economic growth and inflation. When the Fed tightens policy in the fourth quarter, the US stock market will fall by 20% or more. "

At the same time, McCullough is optimistic about the future performance of gold and silver. While still bullish on energy, the sector could also be one of the first sectors for analysts to sell in the future, he said. "I'm just looking at inflation and trying to find peaks, and oil and energy stocks represent this trend. Given that we think the US stock market is about to pull back, our stock exposure is very small. In addition, McCullough is once again bullish on long-term Treasuries because the Fed's future policy path is not expected to be as radical as the current market expectations.

McCullough believes that the Fed can only raise interest rates twice at most. "if their second rate hike was at the meeting in May, I think that might be the case. If I am wrong and the Fed does not correct their policy mistakes, then I will be more correct in shorting credit and the US stock market. "