Top Wall Street Economist Says ‘No Landing’ Scenario Could Sink Stock Market Rally

A hot labor market could see the U.S. economy avoid a slowdown or recession, forcing the Federal Reserve to crank interest rates higher than market participants anticipate. That isn’t good news for stock-market investors, warned a top Wall Street economist.

The risk is a “no landing” scenario, which would mean more downside for U.S. stock and credit markets because it will force the Federal Reserve to raise its benchmark interest rate higher than market participants or central bankers currently expect, said Torsten Slok, chief economist and partner at Apollo Global Management, in a phone interview on Tuesday.