NEW YORK: Citigroup Inc’s Tobias Levkovich warned that investors should be bracing for more volatility as Federal Reserve tapering, the possibility of higher taxes, margin pressures and persistent inflation become forces “that the bond market has to respond to.”

       “We’re a bit more cautious,” Citigroup’s chief US equity strategist said in an interview on Bloomberg TV, adding that these four potential problems “could cascade onto each other around September” as valuation is extended.

       Levkovich’s year-end target of 4,000 for the S&P 500 Indexshows how bearish he is on the current market landscape. His earmark sits more than 10% below the benchmark’s all-time high on Friday.

       He doesn’t see much of an economic boost coming from the US$550bil (RM2.33 trillion) infrastructure bill awaiting House of Representatives approval because “less than 25% is pure infrastructure,” he said. “It’s not quite the game changer that people are hoping for.”

       While some investors are concerned about how the turmoil in Afghanistan might damage market sentiment, Levkovich didn’t see this as much of a market threat.

       “Geopolitical events always complicate things, and it’s always difficult to predict them even though you know there are risks out there,” he said. “I don’t see this as necessarily toppling the agenda of the administration.” — Bloomberg