Stocks will continue to plummet as the Federal Reserve continues to hike interest, according to emerging-markets investor Mark Mobius.
In an interview, the legendary fund manager warned the worst is yet to come for investors despite the S&P 500 surging by over 8% last month.
“We probably have another leg down as the Fed continues to raise rates,” Mobius told MarketWatch last week. “I expect rates to go much higher and that means a number of companies will be in trouble.”
Investors have struggled with rising interest rates since March as the US central bank attempts to tame inflation – which hit a 41-year high of 9.1% in June.
However, a bullish sentiment surrounded the market last month after the Fed’s chairman Jerome Powell indicated that he favored a softer, more data-driven approach to rate hikes.
Mobius has predicted that rates will have to surge up 7% to drag down inflation to the Fed’s target 2% range. He warned the Fed would likely remain hawkish, thereby creating another problem for the already struggling growth stocks.