Capital Link International CEO Brett McGonegal expects markets to go through a period of volatility until mid-February. Photo: CNBC screen grab

Speculation over possible fiscal policy reforms has primed markets for a period of volatility until mid-February, says Capital Link International CEO Brett McGonegal.

Speaking on CNBC’s Squawk Box program on Wednesday, McGonegal says the current market upswing has been largely driven by speculation of potential fiscal policy reform that could reflate the US economy.

McGonegal says there is a lot of popular support behind this concept but warns that it is only speculation. “There’s a lot to play out. A lot of facts are not really known yet until Trump comes into office,” he says. “I see a softening market until mid-February, when everything starts to unfold. I think you will probably see a 5% retracement here.”

He added: “I do think you’ll see some volatility because as we get closer to the inauguration and things start to get articulated you’re going to get a lot of bits of information that get interpreted by the market and you’ll have some volatility ahead of that.”

McGonegal also sits on the Asia Times Board of Directors.