The best way the Federal Reserve can help the troubled stock market would be to “just do nothing,” closely followed market watcher Dennis Gartman said Tuesday.
“I hope the Fed keeps its mouth shut for a while,” the founder and publisher of The Gartman Letter told CNBC’s “Squawk Box.”
“If the Fed were to move in the opposite direction, start to move to ease monetary policy, it would raise confusion.”
With stocks tanking in February after the worst January run since 2009, some Wall Street observers are wondering whether the next move for the central bank might be an interest rate cut, rather than a hike.
U.S. stock futures were under pressure Tuesday morning, after a 5.4 percent drop in Japanese stocks overnight. The Dow Jones industrial average on Monday had been down 400 points, before recovering to more than halve those losses by the close.
But on a two-session losing streak ahead of Tuesday trading, the Dow and S&P 500 remained firmly in correction territory, while the Nasdaq composite flirted with a bear market.
The Fed increased rates for the first time in more than nine years in December, and has projected four more rate hikes in 2016. But few in the market believe policymakers can be that aggressive with stocks in turmoil, oil prices languishing and concerns about China’s economy.