David Rosenberg doesn’t buy the latest cheerful economic narrative on Wall Street. The veteran strategist and founder of Rosenberg Research argues a recession is inevitable as the Federal Reserve’s rapid interest rate hikes work to slow the economy.
Recent robust labor market and consumer spending data have led some economists to believe in a “no landing” scenario—in which interest rate hikes don’t spark a recession, economic growth continues, and inflation remains stubborn. But Rosenberg says the Fed will continue to raise rates until inflation “melts,” no matter the consequences.
“The ‘no landing’ narrative is the biggest hoax Wall Street economists have peddled since ‘global decoupling’ in 2008. Follow the leading indicators, not the Pied Pipers,” he tweeted Thursday.
Rosenberg was referencing the “global decoupling” argument of the early Global Financial Crisis (GFC) in 2008. The idea was that emerging market nations’ business cycles were diverging from those of developed nations, meaning that the U.S. economy could fall into a recession without sparking a global crisis.
“Greater economic integration among industrial countries and among emerging market economies has been associated with the emergence of group-specific cycles,” IMF economists wrote in a June 2008 research paper.
But less than a year later, the organization admitted that “financial stress can spread rapidly to emerging economies” and “financial links with advanced economies are a key channel” after the GFC continued to wreak havoc worldwide.
Rosenberg believes economists who argue the U.S. can avoid a recession are making a similar error to their IMF predecessors. He described what he called the most important metric to measure the “cyclical guts” of the economy: “real private demand”—referring to something that’s technically called real private sales to domestic purchasers.
The statistic measures final sales to domestic companies while subtracting the effects of government consumption, and is used to gauge underlying economic strength. In the fourth quarter, it rose just 0.1%, even though gross domestic product (GDP), another common measure of economic growth, jumped 2.7%.
“So, guess what? The economy has already landed!” Rosenberg argued.
The strategist’s latest comments are far from his first warning for investors. Rosenberg is well-known for delivering bearish economic forecasts. In October, he argued that the Fed’s rate hikes were “overkill,” inflation would drop to 3% this year, and an “economic storm” was brewing. And earlier this month, he warned a recession was already beginning and the S&P 500 could drop 30%.
On Friday, Rosenberg offered a word of advice for retail investors looking to avoid the pain he’s expecting in markets.
“‘How to Keep Calm and Carry On Investing When Recession Looms.’ A lot of space could have been saved with just one word. Cash,” he wrote.
This story was originally featured on Fortune.com
More from Fortune:
5 side hustles where you may earn over $20,000 per year—all while working from home
Millennials’ average net worth: How the nation’s largest working generation stacks up against the rest
Looking for extra cash? Consider a checking account bonus
This is how much money you need to earn annually to comfortably buy a $600,000 home