The market was expecting Fed Chair Janet Yellen on Wednesday to indicate that the central bank will reverse its course, Jim Grant, founder of Grant's Interest Rate Observer, told CNBC's "Closing Bell" on Wednesday.
Yellen appeared before Congress for semiannual testimony. Yellen told the House Financial Services Committee that she doubts that it'll be necessary to cut back interest rates, despite global economic concerns.
"I think that the Fed was trying to do the right thing, but it turned out to be the wrong time," Grant said. "I think the Fed missed its market."
Global growth concerns have impacted the markets, but Grant says the U.S. is already in a recession.
"I think we are in one," he noted. "I think there's a defensible case to be made that a recession began late last year."
Grant, who previously said that the Fed will be forced to backtrack on its December rate hike policy, noted that the central bank doesn't control all rates. He says that it "influences all" rates, and it's been for the downside for many years. Grant says that the consequences of that influence is the "mispricing of risk and misallocation of capital."