Point 72 Chairman and CEO Steve Cohen said he turned bearish on stocks for the first time in a while, warning of a “significant correction,” CNBC reports.

Cohen believes tariffs will stoke inflation and aggressive cuts to the federal budget by the Department of Government Efficiency will be a drag on the economy. He is also against a crackdown on illegal immigration.

“Tariffs cannot be positive, okay? I mean it’s a tax,” said the prominent hedge fund manager, speaking Friday at the FII Priority Summit in Miami Beach, Florida.

“On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as the last five years or so.”

On Elon Musk’s plan to cut $2 trillion from the federal budget through DOGE, Cohen said, “When that money has been coursing through the economy over many years, and now, potentially will be reduced or stopped in many ways, it has got to be negative for the economy.”

Cohen warned of a pullback in stocks and the U.S. economy slowing to 1.5% from 2.5% in the second half of 2024.

“I think we’re seeing the regime shift a little bit,” Cohen said. “It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.”

However, Cohen added, “I don’t think it’s going to be a disaster.”