The Federal Reserve's interest-rate tightening policy will rely on a lot of talk and selling some assets before any actual hike in rates, Dennis Gartman, founder of The Gartman Letter, told CNBC Thursday.
Fed officials have recently been talking about an exit strategy, with Philadelphia Federal Reserve Bank President Charles Plosser saying Tuesday the central bank may have to raise rates even before unemployment falls to an "acceptable level."
"The economy is in fact doing better," Gartman told "Squawk Box Europe."
"You can actually see it on the streets, the hotels are more crowded, the streets are more crowded," said Gartman, who is currently in New York.
On Wednesday, James Bullard, president of the St. Louis Fed, told CNBC he thought the economy would grow more strongly in the fourth quarter than in the third.
The Federal Open Market Committee is determined to keep inflation low, but cautioned that it is a "rough time" for monetary policy, Bullard said.
Preparing the Market
Richmond Fed President Jeffrey Lacker said central bankers should not let pockets of economic weakness distract them from fighting inflation as growth recovers.
The propensity of Fed officials to err on the side of monetary tightening is quite high, but they are not likely to take any drastic action, according to Gartman.
"They really do understand better the impact of the press, they understand how important CNBC has become… they want to make sure the market is prepared for when they do begin to haul the liquidity out of the system," he said.
The Fed will look for "smooth" employment numbers before deciding on raising rates, as currently employment numbers are "chaotically revised" month to month, Gartman explained.
"Is there any chance the Fed is going to tighten in first half of 2010? I doubt that very sincerely," he said.
Selling the assets bought during the quantitative easing efforts, such as mortgage-backed securities, may be the first tightening measure the Fed will take, he added.
Meanwhile, Fed chairman Ben Bernanke faces a tough grilling in Senate but he will almost surely win a second term.
"Mr. Bernanke will be reappointed. He should be. The vote will be very close… he will probably be reappointed by one or two votes," Gartman predicted.