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Fed risks doing more harm than help: Jim Paulsen

If the Federal Reserve continues its monetary policy, it risks doing more harm than good, investment strategist Jim Paulsen said Wednesday.

The Fed "is still practicing an unprecedented massive unconventional crisis-like monetary policy in an economy that has not been in a crisis in more than five years," Paulsen said in an interview with CNBC's "Street Signs."

"The Fed, if they're going to continue this much longer, is risking more harm than help anymore."

Read MoreDruckenmiller: Fed policy 'fraught with unappreciated risk'

That said, he thinks the market will force the central bank to accelerate its quantitative easing exit strategy.

Jim Paulsen, Chief Investment Strategist, Wells Capital Management
Adam Jeffery | CNBC
Jim Paulsen, Chief Investment Strategist, Wells Capital Management

"The Fed is more like the rest of us than we like to think. That is to say, they're not really in control either. It's not up to when the Fed decides to tighten, it's up to laissez-faire," Paulsen said.

Read MoreFed's Fisher: First rate hike 'likely' early 2015

The chief investment strategist for Wells Capital Management said all it could take is a slight change in the jobs report, like wages accelerating a little higher, and the conversation will quickly shift to the Federal Reserve being behind the curve.

"We're going to get some hot inflation data and if we do, I think it's going to force bond yields up over 3 percent, it's going to bring intensity around the conversations surrounding Fed, and it's going to force them to accelerate their exit strategy," Paulsen said.

Read MoreStocks near record highs; Fed says economy expanding

—By CNBC's Michelle Fox

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