Dennis Gartman, chairman of the Akron university endowment and a prominent investor, says us stocks are at risk of falling another 10 per cent as the fed raises interest rates.

"Last Thursday and Friday, a lot of my long positions were stopped," Gartman said in an interview with Bloomberg on Monday. "

He said:

Us stocks are likely to fall further. The use of margin has been declining, which has been one of the signs that the market is peaking. Be careful, I think US stocks will fall by at least 5%, 10%, maybe more.

Gartman has long predicted a bear run in US stocks and predicts that the catalyst will be the Fed's hawkish policy of raising interest rates as it needs to fight the fastest inflation since the 1980s.

However, while Gartman has published the influential the Gartman Letter, he has also admitted that his forecast for a bear market in 2021 was wrong, with the S & P 500 up about 27 per cent last year.

So much so that some investors regard his forecast as a reverse indicator.

ZeroHedge, a notoriously venomous financial blog, commented that algorithms, quantitative investments and hedge funds, as well as almost all investors, read the Gatmanson book just to do the opposite. And because Gartman's forecast for 2022 is still more pessimistic, bulls everywhere have a lot of hope to seeWhen the Fed announces that it will start buying ETF in a few months, the stock market is likely to soar to an all-time high.

But then again, the S & P 500 is down 11% so far this year. Gartman said in January that US stocks could face a fall of as much as 15 per cent in 2022.

Does the Fed have the courage to raise interest rates to the "pain zone"?

Today, analysts' forecasts for market movements depend largely on tighter forecasts of the Fed's policy actions.

In line with Gartman's view, it is widely believed that to really curb inflation, the Fed needs to raise the federal funds rate to the "pain zone".

At present, the futures market has digested the expectation that the Fed will raise interest rates by 50 basis points at the FOMC meeting next month, 75 basis points at the June meeting and 50 basis points at the July meeting.

However, some fund managers question whether the Fed is brave enough to do so.

Luke Ellis, chief executive of investment management company Man Group, told CNBC on MondayHe doubts whether the Fed has the confidence to act aggressively enough this year, especially as headline inflation shows signs of abating and November's mid-term elections approach.

Us CPI rose 8.5 per cent in March, a 40-year high, but core inflation fell slightly, providing some hope that inflation could be close to its peak.

Ellis says:

This means that inflation lasts longer and ultimately more painful, but the question is whether the Fed has the courage to really push up interest rates to curb inflation.

Sceptical of the Fed's aggressive tightening, the fund manager advised investors to adjust their portfolios to cope with a "prolonged tightening process".