\n \u201c<\/span>\u2018Bitcoin, I call it a tumor. Real estate is another tumor. People have this notion that markets should behave the way they think they should behave. When you look at markets they swing from overvalue to undervalue.\u2019\u201d<\/span>\n <\/p>\n Investors may appreciate easy-money monetary policy for the lift it has given markets since the pandemic in particular, but Nassim Taleb, the \u201cBlack Swan\u201d author and risk-management guru, doesn\u2019t think it has done them any favors. <\/p>\n In a freewheeling interview with CNBC\u2019s \u201cSquawk Box\u201d on Thursday, Taleb said that the Federal Reserve\u2019s decision to keep monetary policy so easy for so long until recently has created at least a couple of \u201ctumors\u201d in markets. And it may also have potentially misled a generation of investors into underestimating the ease of making a living picking stocks. <\/p>\n He named \u201cbitcoin\u201d As the longtime investor and author explained, the current crop of market participants hasn\u2019t really had to grapple with the implications of a recession which may result from the interest rate rises currently being orchestrated by the Fed. It\u2019s arguably the first time this has occurred since the 1980s. <\/p>\n \u201cNow, people will discover that there\u2019s time value of money,\u201d Taleb said, referencing a popular economic concept that explains why a dollar today is worth more than the same dollar at some point in the future. <\/p>\n \u201cThey need to learn what economic policy should be and what monetary policy shouldn\u2019t be,\u201d he said. \u201cYou need to bring interest rates back to a normal level and they can\u2019t vary much.\u201d <\/p>\n When asked what he would consider \u201cnormal,\u201d Taleb said around \u201c3% or 4%\u201d which is right around where Fed funds futures traders are anticipating interest rates may be later this year, according to the CME\u2019s FedWatch tool. <\/p>\n Stocks have fallen sharply 2022, with the S&P 500 He also cautioned the Fed against turning back, and said that \u201ca generation of people\u201d have made a lot of money from investing using \u201cthe wrong methods\u201d due to low interest rates and the Fed\u2019s quantitative-easing bond buying. <\/p>\n \u201cI would be careful not to use monetary policy by lowering interest rates too much because that\u2019s what brought us here, he said. <\/p>\n Toward the end of the conversation, as the credits started to roll, talk turned to Tesla Inc. \u201cElon Musk blocked me on Twitter,\u201d he joked, a reference to a tweet from earlier this year. <\/p>\n \u201cSquawk Box\u201d hosts Andrew Ross Sorkin and Becky Quick responded with a joke in kind: if Musk should gain control of Twitter Inc.
\n \u2014 Nassim Taleb<\/span>
\n <\/small><\/p><\/div><\/div>\n
\n BTCUSD,
\n -1.17%<\/a>
\n as one of these \u201ctumors,\u201d and perhaps \u201creal estate\u201d too, he said, possibly a reference to Starwood Capital Chief Executive Officer Barry Sternlicht, who was also featured on the program alongside Taleb, and who recently shared some of his own foreboding comments<\/a> about the real-estate market. <\/p>\n
\n SPX,
\n -1.43%<\/a>
\n in a bear market as the Fed aggressively raises rates in its effort to get inflation under control. The S&P 500 was off 0.6% on Thursday afternoon, while the Dow Jones Industrial Average
\n DJIA,
\n -0.78%<\/a>
\n held near the flat line and the Nasdaq Composite
\n COMP,
\n -1.88%<\/a>
\n slumped 1%.<\/p>\n
\n TSLA,
\n -0.10%<\/a>,<\/span>
\n and then to its CEO Elon Musk. <\/p>\n
\n TWTR,
\n +0.45%<\/a>
\n and kick Taleb off the platform, he could \u201calways come here.\u201d <\/p>\n<\/p><\/div>\n<\/div>\n