A Donald Trump presidency could hold significant economic benefits, but a major challenge for the administration will be a huge bond bubble on the verge of bursting, analyst Peter Boockvar said Friday.
"I'm optimistic that the regulatory noose around the economy is going to loosen up. It'll be bullish with lower taxes. The problem that Trump faces is that we have an unwinding of a tremendous bubble. This is the biggest bubble we've ever had that is now leaking," Boockvar said.
The Lindsey Group analyst told CNBC's "Squawk Box" that the bubble "of epic proportions" could cause rates to move up rapidly.
"The July lows in global interest rates we may never see again in our lifetime," Boockvar said. "We have to deal with the consequences of that shift higher in interest rates because the Fed and other central banks have created an economic construct and an asset-priced construct based on very low interest rates, so there has to be an adjustment."
And, with global growth generally sluggish and the cost of capital rising, Boockvar said the normalization of rates may not be felt until the second, third, or even fourth year of Trump's presidency.
Either way, Boockvar still believes that the end of the bond bull market is approaching, as he wrote in an opinion editorial for CNBC in September.