Donald Luskin, an economist andTrendMacro CIO said that “deflation is coming” and it will cause a stock market crash. Ahead of the December meeting, Luskin argued the Federal Reserve’s “dangerously high” interest rate hikes are transitory, and that the Fed will make cuts in the first quarter of next year.

“Please, please, please, can we all stop listening to Jay Powell? Please. Mr. Inflation is transitory. He is still so embarrassed about that one. He’s now insisting that his dangerously high interest rates are not transitory. Oh, they will be,” Luskin said according to a report by Fox News. “Inflation is collapsing and he knows it. It’s turning into deflation like I warned last time we talked. There will be rate cuts in Q1.”

Lusking made the comments on “Mornings with Maria,” as he explained his frustration with the Fed’s rate hike campaign and his economic outlook.

The Fed has raised interest rates sharply over the past year, approving 11 rate increases in the hopes of crushing inflation and cooling the economy. In the span of just 16 months, interest rates surged from near zero to above 5%, the fastest pace of tightening since the 1980s.

The Fed voted during meetings in both September and November to hold interest rates steady at a range of 5.25% to 5.5%, the highest level in 22 years. -Fox Business

Luskin claims that the signs are pointing to deflation now as inflation has already hit hard. “We did four back-to-back 75 basis point rate hikes in the middle of last year. That’s never happened before. The last of them was over a year ago. Don’t you think we’d start seeing that right now?” Luskin said.

Investors now see a near 100% chance that Fed officials will hold interest rates steady at their final meeting of the year on December 12-13, according to data from the CME Group’s FedWatch tool, which tracks trading.  Other investors also expect the central bank to begin cutting rates in the middle of next year amid signs the economy is cooling.

“In two weeks, the next time CPI reports, it’s going to be the second back-to-back monthly number with a minus sign in front of it. We are at the beginning of the wavefront of outright deflation,” Luskin predicted.

“We are going to have statistical deflation, which I think is a very good thing after the big inflation we’ve had. That doesn’t mean the Fed won’t panic. That doesn’t mean the market won’t panic. So I think, probably sometime late first quarter of next year, second quarter, we’re going to have a severe correction in stocks. It will be a buyable dip.”