Wall Street misreading Trump and the bloodbath in the market is inevitable, according to David Stockman

Former chief official to the federal budget, David Stockman, strongly warns investors that there's going to be a disaster in Washington, which will not even see it coming.

In the last week, Dow and S&P soared because of Trump's speech in Congress and market sentiment was bullish on the policy agenda .

According to Stockman, an ardent critic of Trump, "Wall Street interpreted completely wrong Washington" and pricing is a fantasy incentives Trump that simply will not happen. There will be no tax reform, not 15 or 20 dollar a share reduction in the corporate rate.

He added that the government will shutdown completely unexpected, and it will spook everybody.

On Friday, Yellen said that the possibility of interest rates hike during the current month are very high. Rising interest rates will continue gradually in the coming months and years, which will support the economy and keep it from significantly overheating.

Stockman however, is not impressed by this. He claimed he did not see anything that would accelerate the economy or profit and sees a huge mess. Fiscal impasse in Washington will remove some of the incentives that some traders expect on infrastructure and major tax cuts.

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