hawkish comments from federal reserve officials and a hotterthanexpected august inflation report have weighed on stock markets in recent weeks as investors grapple with the prospect of higherforlonger rate hikes even as recession concerns mount the fed announced a third consecutive 75 basis point hike on wednesday that took its federal funds rate up to a range of 3325 the highest it has been since early 2008 projections from the meeting indicated that the fed expects to raise rates by at least 125 percentage points in its two remaining meetings this year speaking ahead of the fed meeting investment veteran patrick armstrong believes the fed is unlikely to keep hiking rates indefinitely i think consensus probably has the fed getting to 425 in march next year and then probably pausing it will be driven by the us economy as much as the inflation outlook i think the us is going to be on the cusp of a recession throughout early 2023 so its hard for me to see the fed hiking aggressively once they realize the us is pretty much in a recession or very close to a recession armstrong who is chief investment officer at plurimi wealth told cnbcs squawk box europe on monday armstrong is cofund manager of the prosper global macro fund  a diversified multiasset fund with an inflation beating mandate the fund was up 48 as of the end of august outperforming major indexes in both the us and europe the s  p 500 and the stoxx 600 are down about 20 and 15 respectively in the same period whats in his portfolio amid the uncertainty in stock markets he believes the biggest risk is the earnings outlook which remains way too optimistic we have not seen any significant negative revisions despite overwhelming evidence of a really poor economic backdrop where consumer spending is really going to be impeded margins are going to be squeezed and so are earnings per share he said against this backdrop the prosper global macro fund has taken on several short positions as armstrong bets that the values of these holdings will decline amid the market volatility the biggest short holding in the fund is a 20 bet against 10year japanese government bonds the bank of japan owns half of all bonds that are outstanding theyre desperately trying to cap their interest rates at 025 when other central banks are aggressively hiking … with a 40year low yet youre going to be importing inflation i just dont see any realistic scenario where the boj can keep this 0 10year in place so i think thats an incredible short right now he said armstrong was referring to the bank of japans yield curve control ycc policy a strategy that caps 10year jgbs around 0 and offers to buy unlimited amount of jgbs to defend an implicit 025 cap around the target read more fund manager says the bear market is going to get nasty but says hes not freaking out looking for a shortterm trade this etf carries risk but outperforms when volatility spikes the japanese yen is at 24year lows heres what to expect at the next boj meeting the fund also holds shorts in several tech and consumer stocks such as food delivery service doordash  chinese electric vehicle maker xpeng  british online supermarket ocado and plantbased meat substitute firm beyond meat  armstrong also sees significant downside for commercial property stocks in the uk and retail property stocks in the us where his fund is short british land and simon property  respectively he said it is a pretty toxic environment for commercial properties in the uk with the economy in pretty terrible shape while the prospect of further interest rate hikes by the bank of england will weigh on land value the same challenges afflict the us retail scene in addition to an increasing trend of consumers shopping online he added cnbcs jeff cox contributed to the report