The Nasdaq selloff isn’t over and the economy is headed for ‘painful stagflation,’ says Galaxy Digital CEO Mike Novogratz

Michael Novogratz speaks onstage during the 20th Anniversary Gala to celebrate Hudson River Park at Pier 60 on October 11, 2018 in New York City.
Michael Novogratz.

  • The Nasdaq has more downside ahead and could fall as low as 10,000, according to Galaxy Digital CEO Mike Novogratz.
  • He also told CNBC that the economy won’t have a soft-landing with painful stagflation to come. 
  • “When inflation gets as high as it gets, you need to put the economy in a recession to stop inflation,” Novogratz said.

The massive stock market sell-off isn’t over yet as there’s a lot more turmoil ahead for the economy, Galaxy Digital CEO Mike Novogratz predicted Friday.

The comments come a day after the Dow Jones Industrial Average tumbled more than 1,000 points and the Nasdaq sank 5%, with both indexes notching their worst days since 2020. Stocks continued to sell off Friday.

“I do think there’s more pain to come,” Novogratz told CNBC, adding that it is possible the Nasdaq will hit 12,000 in the coming weeks or even a “final destination” of 10,000. 

“What you’re seeing now is biq liquidation,” he continued. Some of the big hedge funds are down, which often leads to liquidation, and “the market senses blood.”

Bear markets, he noted, are hard to trade in, and he expects to see “vicious” bear market rallies. But he warned the Federal Reserve won’t be able to deliver a soft-landing with its monetary policy. 

On Wednesday, the central bank raised benchmark rates 50 basis points, adding to its March rate hike of 25 points, and laid out plans to shrink its balance sheet, as policymakers try to bring inflation down from its 40-year-high. 

“When inflation gets as high as it gets, you need to put the economy in a recession to stop inflation,” Novogratz said. “Until we see layoffs, until we see not 11 million people looking for jobs, you’re not going to see inflation come down. We’re going to go through a painful stagflation process. We’re in it.”

Read the original article on Business Insider

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