Billionaire hedge fund manager Paul Tudor Jones suggests that the Federal Reserve has concluded its campaign of raising interest rates to combat inflation, and he envisions the stock market gradually climbing higher throughout the year.

Expressing his views on CNBC’s “Squawk Box,” Jones confidently stated, “I definitely think they are done,” referring to the Fed’s rate hikes. He further pointed out that the Consumer Price Index (CPI) has experienced a decline for 12 consecutive months, a historical first. As evidence of a cooling economy, the CPI eased to 4.9% in April, down from its peak of around 9% in June 2022.

Jones drew comparisons between the current market conditions and those in mid-2006, preceding the global financial crisis, noting that stocks continued to rise for over a year after the Federal Reserve ceased tightening monetary policy. While he anticipates a slow and steady climb in equity prices this year, Jones emphasized the potential for short-term turbulence due to the ongoing political battle over raising the U.S. debt ceiling. He expressed his intention to take advantage of any market dip caused by political volatility.

Renowned for his accurate prediction and profitable trades during the 1987 stock market crash, Jones serves as the chairman of the nonprofit organization Just Capital, which evaluates U.S. public companies based on social and environmental factors.

Furthermore, Jones believes that the stock market holds substantial untapped potential following a period of limited deal-making activity. Highlighting the absence of initial public offerings (IPOs), calendar events, and secondary offerings, he observed that despite valuations being at 19, there is a lack of market activity in terms of new offerings. Jones considers this from a flow perspective to be a positive sign.