(Bloomberg) -- Wall Street veteran Edward Yardeni says this time the Federal Reserve is unlikely to give the market any more liquidity should financial assets take a deep dive. But that won’t stop stocks from heading higher.

“We’ve had four taper tantrums since 2013,” Yardeni, president and founder of Yardeni Research, said on Bloomberg TV’s Surveillance Tuesday, referring to market turmoil when the central bank tries to tighten monetary policy. “We had one in May of 2013, another one in early 2016, one right before Christmas in 2018, then this one. This one is a work in progress.”

The central bank has already begun the withdrawal of liquidity by tapering its bond-buying program. Should volatility increase, the Fed won’t be able to “give the market what it wants,” according to Yardeni. That means the central bank probably wouldn’t stop the reduction of asset purchases as or back away from eventual rate hikes

“The inflation problem is real and the Fed has made it very clear that they are now concerned about it. So it’s going to be pretty hard for them to back off,” Yardeni added.

A key gauge of U.S. inflation -- the consumer price index -- is expected to show on Dec. 10 that prices continued to rise at a rapid clip in November. Persistent supply chain challenges, transportation bottlenecks, robust consumer demand and higher wages have all played a role in recent price growth.

While inflation will likely moderate, “I would not be surprised if the Fed deals with that by raising the Fed funds rate by maybe two or three times,” said Yardeni, whose four-decade career includes a 1976-1977 stint as an economist at the Federal Reserve Bank of New York. “But I think they might seriously consider raising the inflation target, moving the goalposts, from 2% to 3%.”

Still, Yardeni expects financial markets to weather any disruption from inflation, helped by productivity gains from companies using new technology. Yardeni, who has called the current era “The Roaring 2020s,” forecasts the S&P 500 at 4,800 by the end of the year -- an increase of about 4.5% from Monday’s close -- and to 5,200 by the end of 2022 and 5,500 by year end 2023. 

“I am a big believer that productivity is making a huge comeback,” he said.

©2021 Bloomberg L.P.