Cresset Capital's Jack Ablin warns that June's big market gains could vanish in an instant on Wednesday afternoon.
With Day 2 of the Federal Reserve meeting on interest rates kicking off, the firm's chief investment officer believes the market is too optimistic a cut is ahead.
"There is absolutely no reason for the Fed to act," the $4.7 billion money manager told CNBC's "Futures Now" on Tuesday. "The markets are not going to like it."
But that doesn't meant a move won't come. According to Ablin, a less-than-fruitful G-20 summit in Japan at the end of next week could further derail market gains and provide the catalyst for the Fed to ultimately ease.
"We expect a disappointment in Osaka next week, and then the Fed to come back in July and lower rates," said Ablin, who predicts President Donald Trump and China President Xi Jinping won't agree to a meaningful deal there to end the trade war.
And that could set the market up for an even bigger rate cut.
"It's possible if disappointment in the equity market is big enough, they could come back with a 50-basis-point move in July," he said. "There's a difference between what the Fed should do and what the Fed will do. I actually don't think the Fed needs lower rates to ... boost the economy."
In the end, he predicts the Fed will cut to "calm down investors who are berating them, including the White House."
The Dow and are within 2 percent of all-time highs — gaining more than 6 percent in June.
Ablin, who has a bullish 3,000 year-end target on the S&P, does not believe a sharp, near-term market pullback would create irrevocable damage. But he acknowledges the situation for investors is far from ideal because it's challenging to figure out how the risks will play out.
"As long as the central banks use the equity markets as a barometer, then we should be taking risk," Ablin said.