The five-year commodity bear market appears to be coming to a close, and that could spell trouble for the Federal Reserve, Peter Boockvar, chief market analyst at the Lindsey Group, said Thursday.
The Dow Jones commodity index had fallen roughly 50 percent since 2011, but the asset class has recently shown signs of turning a corner. It has risen more than 13 percent this year.
"I think this bottom is for real. I think that it's not demand driven, it's supply driven," Boockvar told CNBC's "Squawk Box."
He said that puts the Federal Reserve in an "interesting situation" because rising commodity prices combined with services sector inflation running at about 3 percent will likely send headline inflation to the central bank's 2 percent target.
That could force the Fed to raise interest rates sooner than policymakers anticipated.
It would be one thing if the commodity bounce were demand driven, indicating stronger global growth, Boockvar said. But since the rise is being fueled by a reduction in supply, the Fed could be grappling with higher inflation and middling economic growth, he said.