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Editor's Note: Below is the entire video and an excerpt transcribed from Senior Macro analyst Darius Dale's recent appearance on CNN Business's "Markets Now" segment.

Darius Dale on CNN: There's More Downside Coming - dd cnn

CNN Host Julia Chatterley: Put all this into context for us. Weaker Chinese data. The data was already weakening and that caused investors to be very nervous on a global basis about the data that we’re seeing. You’ve been saying this for a while. 

Darius Dale: We’ve said this all year. Investors have been focused on all these soft catalysts like tariffs, Trump and whatever, the noise. And what we’ve said all along is that both the forest and the trees are the cycle. Growth, inflation and the profit cycle.

You can call them whatever you want the connection, the plug, the forest and the trees but these things are slowing and they’re going to continue to slow for the next few months.

Chatterley: So let’s bring this back to the United States because we are seeing a material slowdown in some of the data. We’re not seeing inflation. We’ve got a Federal Reserve who’s talking about raising rates in December. You were waiting for Jay Powell to “blink” as you said.

Dale: He’ll blink in January.

Chatterley: Hasn’t he already blinked?

Dale: He’s blinked but we actually think he’s going to have to implement a full dovish pivot by the time we get the Q4 GDP data in late January. We do think they’re going to hike next week.

Unfortunately, it will be another tightening into an obvious economic slowdown which is why you’re seeing asset markets respond negatively.

Chatterley: So he’s got to be very careful about how he does this? I mean, the markets have effectively priced that in and we’ve been talking for a long time about the hike in December. How does he adjust the language to say “I’m hiking here to take some steam…”

Dale: Just take a page out of Draghi’s playbook. Just follow the European Central Bank. They’re so good about saying and doing absolutely nothing and convincing market participants to do exactly what they want. I think he’ll manage it. We know they’re going to hike but the language surrounding that, the language around the outlook may make it open ended so that they can take a pause in January.

Chatterley: So you’re saying that he actually waits until January to do the real pivot?

Dale: Yes, so right now they don’t have enough hard data to suggest that they’re able to pivot in January and not hike in December. They actually might even spook markets if they don’t hike in December because it’s priced in.

People might say ‘What’s the Fed seeing that we don’t see?’ But in January we have a 1-handle on our Nowcast for headline GDP. Consensus still has to come down from about 2.8% or 2.5% in terms of downward revisions to their forecast. We’re at 1.4%. If we get that he’s going to have to pause in January.

Watch the full interview below