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The Fed is doing everything wrong: Peter Boockvar

When it comes to a flat U.S. market that appears handcuffed by indecision, one of Wall Street's top market watchers says unclear monetary policies are to blame.

"The Fed has a problem," explained Peter Boockvar on CNBC's "Futures Now" on Thursday. "The unemployment rate is at 5 percent and inflation is now rising, so based on that, they should be raising interest rates."

However, The Lindsey Group's chief market analyst noted that, given the recent flow of poor data, the Fed would theoretically have a better case to revert to an even more dovish approach.

"Economic growth is falling to 1.5 percent. The Atlanta Fed, two months ago, was predicting 3.8 percent growth. Now, they're predicting 2.1 percent growth," warned Boockvar. "Under those scenarios, the Fed should actually be cutting interest rates. They're really stuck here."

Amid the conflicting data, Boockvar has been further discouraged by the Fed's rhetoric following September's meeting.

"The minutes told us nothing," complained Boockvar. "We came out of the last meeting and, in the press conference, Yellen said the case for a rate hike had strengthened. Nothing seems to have changed that based on a lot of the speeches. We know it was a close call based on three dissenters, and the minutes basically confirmed that."

Indeed, Boston Fed President Eric Rosengren, Cleveland's Loretta Mester and Esther George of Kansas City all went against the Federal Open Market Committee's decision to keep rates unchanged.

Now, despite this hawkish resistance, Boockvar anticipates that the Fed will continue to kick the can into 2017. This is mainly based on Philly Fed president Patrick Harker, who recently cited "market instability" before the election.

"We have a Fed president, albeit nonvoting, who is saying essentially, 'Let's wait to see who the next president will be before we hike, because they may have certain economic policies initiated that we may need to respond to or maybe not, but let's wait anyway,'" concluded Boockvar in a recent note.


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