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A trusted voice on Wall Street is warning investors not to rush into the markets. 

“The biggest mistake investors make is that when the markets are going up, they rush to get in and the markets are going down, they rush to get out,” said David Rubenstein, co-founder and co-chairman of the Carlyle Group, one of the world’s largest and most successful private equity firms, on “The Claman Countdown.”

“When markets are going up as much as they are, people should look for things that are out of favor right now or things where it’s probably going too high and probably will come down a bit again,” Rubenstein advised. “I think prices are pretty high right now. Maybe they’re going to go up another 5% or so, but they’re not going up 50% from where we are now.” 

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A volatile stock market and recession concerns following the COVID-19 pandemic created a bumpy ride for investors.

Rubenstein told FOX Business’ Liz Claman that the economy is “doing pretty well” and that a recession “seems very much into the future.”

We have recessions every seven years, so at some point there will be a recession. But it doesn’t seem that one is imminent in the next couple of quarters or so,” Rubenstein said.

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However, inflation continues to pose challenges for the U.S. economy. 

The market is “recognizing [that] inflation has come a bit down and [is] probably close to where the Fed wants it, not exactly where the Fed wants it,” he explained.

The Federal Reserve on Wednesday held interest rates steady for the third straight time. The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 22 years.

The Carlyle Group co-founder echoes policymakers’ forecasts and anticipates a rate cut “sometime next year.” 

However, he predicted the Fed will likely cut rates in the second quarter. 

As the Fed continues to get inflation under control, Rubenstein worries that a rate cut in the third or fourth quarter could be seen as “political” as the 2024 presidential election nears.

“Clearly, if you have rate cuts in the third quarter, it will be seen as something to help the Democrats. And I suspect that criticism is one the Fed would like to avoid,” he said. 

FOX Business’ Megan Henney contributed to this report

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