There's an overwhelming risk that's concerning long-time bull Phil Orlando right now.
Inflation, according to the Federated Hermes chief market strategist, could be stickier than the Federal Reserve anticipates. He warns it could spook Wall Street and put investors in the crosshairs of a turbulent summer.
"Inflation levels are going to keep rising," he told CNBC's "Trading Nation" on Friday. "That's going to raise some questions. Is the Fed going to make a policy adjustment at an FOMC meeting or perhaps at Jackson Hole?"
Orlando cited a significant spike in labor costs over the last two months, commodity costs and consumers' willingness to spend more as reasons to be on alert.
"We're happy to do it because we've got plenty of money burning a hole on our pocket," Orlando said. "But those levels of inflation are rising, perhaps at a level a little more aggressive than the Federal Reserve expected."
According to Orlando, it may push the Federal Reserve and chair Jerome Powell out of the transitory inflation camp by the end of summer and pave the way to tapering sooner than expected. Orlando said he regards it as the biggest market threat.
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"That's the potential risk for the market that interest rates rise because of inflation, and that impacts the discount rate in terms of valuation for stocks," he said.
Orlando also sees tax uncertainty creating jitters among investors this summer.
"All of those issues are going to sort of come together and... maybe serve as a wake-up call to the market in sort of this late July-early August time frame," he said.
"GDP growth in the second quarter, we think, is going to be very strong: 9.2%. And, as strong as corporate earnings were in the first quarter, up about 48%, we think earnings in the second quarter are going to be up about 60% or 70%," he added. "So, the numbers right in front of us are terrific."
Orlando, whose firm has $625 billion in assets under management, is confident the S&P 500 will end the year on a high note. His S&P 500 year-end forecast is 4,500, a 6% gain from Friday's close.