Expert: 2022 will not be a ‘great’ year for the market

The benchmark S&P 500 index closed 2021 with a remarkable gain of 29%, but Blackstone’s Byron Wien says the current year will not be nearly as good for the market.

Wien expects a dull market

Wien doesn’t expect a bear market this year but said it wouldn’t continue to rally either. Commenting further on what he anticipates the market will do in 2022, he said on CNBC’s “Squawk Box”:

The market isn’t going to do much in 2022. We’ve had three great years, and I don’t think we’re going to have a fourth great year. We could have a correction any time along the way, but basically, the market will hover around where it is right now for the rest of the year.

His outlook on the ongoing pandemic, however, is rather positive. Wien expects “most institutions and offices” to be operating similar to how they did before the COVID-19 crisis by year end. Days earlier, billionaire philanthropist Bill Gates, however, said the worst of the pandemic might still be ahead.

Inflation is here to stay

The vice-chairman of Blackstone’s Private Wealth Solutions Group does not expect inflation to be “transitory” and expects the economy to continue to overheat in 2022. He added:

You may get some correction in commodity prices before they go back up, but I think rents and wages are headed higher, and that’s going to drive the overall consumer price index and employment cost index higher. Personal consumption expenditures will also be up about 4.5%.

Wien says the U.S. Federal Reserve will raise rates four times this year, and the 10-year treasury will jump to 2.75% in response to the inflationary pressure. Last month, Strategic Wealth Partners’ Mark Tepper said it was time to switch to “defensive growth stock” to protect against inflation.