When the federal, state and local governments in Florida and Texas total the bills from hurricanes Irma and Harvey, the Federal Reserve is going to be forced to put any further interest rates this year on hold, closely watched contrarian strategist Mark Grant told CNBC on Monday.
"With the cost of Harvey and now the cost of Irma, I think there's going to be a market reaction," said the chief strategist at Hilltop Securities, arguing government officials will be under intense pressure because of the cost of emergency and recovery services. "I think the Fed is going to stop, meaning the Fed is not going to call for any more rate hikes now."
In fact, Grant said on "Squawk Box," if the storm damage is "severe enough," the central bank may lower rates, so governments can get access to cheaper borrowing costs for the rebuilding efforts. Perhaps, that's why U.S. stock futures were up more than 100 points in Monday's premarket trading.
Goldman Sachs said Hurricane Harvey, which deluged Houston with days of torrential rain and flooding last month, is expected to be one of the costliest disasters in postwar U.S. history, and its aftermath is likely to be a drag on third-quarter economic growth by a full percentage point.