The Fed's 2% inflation goal is an "absolute trap," according to 40-year market veteran Barry Knapp. Knapp pointed to tightening credit conditions, suggesting more tightening from the Fed could cause a recession. Elevated prices aren't always a drag on the economy, he added, pointing to 3%-4% inflation in the 90s. "The whole 2% target is an absolute trap," The Ironsides Macroeconomics founder said in an interview with CNBC on Tuesday. But elevated inflation isn't necessarily a hindrance to the economy, Knapp said, pointing to 3%-4% inflation in the early 90s, years when the economy expanded and benefited from a huge boom in business spending.

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