The disconnect between the Fed and markets over the trajectory of interest rate policy decisions is promoting volatility and feeding investors' anxiety, Burt White, LPL Financial's chief investment officer, said Wednesday on CNBC.
Though the financial turmoil of 2016 has put the central bank's aggressive path in doubt among market participants, the Fed generally does not care about market swings, White noted on "Power Lunch."
"The big thing we're watching here is the Fed," he said. "The market is really looking for the Fed to signal they're going to be on pause for a while, but the Fed really is pretty resistant to volatility."
And, if the Fed starts to see inflation "show some green shoots," said White, there will be even more concern among investors that a rate hike will occur in this apparently shaky market.
Richmond Federal Reserve President Jeffrey Lacker seemingly confirmed this assertion Wednesday, noting that there is still a case for raising interest rates further, a sign the central bank's internal debate over rate hikes remains a live one.
Lacker said estimates of the economy's so-called natural real rate of interest, the level when economists think there will be normal economic growth rates and stable inflation, is at or just above zero.
"This perspective would bolster the case for raising the federal funds rate target," Lacker said in prepared remarks for a university gathering in Baltimore. He is not a voting member of the Fed's rate-setting committee this year but participates in its discussions.
Right now, the central bank is currently looking for stability anywhere it can get it, added White.
"They're not finding it from the commodities complex. They would love to get it from central banks, and if they could, they would feel better about it. If they don't, we could have a little battle here, more volatility," he said.
— Reuters contributed to this report.