The Federal Reserve delivered 75 basis points of cuts to the benchmark interest rate in 2019, and Guggenheim Partners’ Scott Minerd says liquidity from the central bank could fuel a new bubble.

“They’ve sought to extend the expansion by pivoting late in the expansion from their tightening cycle,” Minerd told Yahoo Finance in an interview at the World Economic Forum in Davos, Switzerland. “I think we’re just living through the same thing again.”

Minerd compared the insurance cuts from last year to the recessions in 1990 and 2001, noting that both episodes were preceded by Fed cuts of 75 basis points (in 1987 and 1998, respectively).

Guggenheim’s chief investment officer said the liquidity boost as a result of easier policy “drove up” assets, pointing to internet stocks as an example in the run-up to the explosion of the dot-com bubble in 2001.

Although Minerd said the stock market is “probably due for a pullback right now,” he says investors should remain long on the stock market for the next year or two. His firm, which operates in the global investment and advisory space, manages more than $275 billion in assets as of September last year.

“I don’t really see the crunch time coming until after the Federal Reserve and these central banks decide it’s time to turn off the liquidity taps and get back to normal,” Minerd said. “And the history of normalization isn’t that good.”

In the meantime, Minerd said investors should be wary of some asset classes, particularly corporate debt. But Minerd said taxable municipal debt looks “very attractive” on a risk basis, and said high yield bonds could be a winner as well.

Minerd cautioned that the overall key is watching the Fed for when it may raise rates again, which could end the expansion.

“They’re in the business of killing expansions,” Minerd said.

Brian Cheung is a reporter covering the banking industry and the intersection of finance and policy for Yahoo Finance. You can follow him on Twitter @bcheungz.

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