Inflation has already peaked and it's time for investors to get back into stocks, according to JPMorgan Asset Management's chief strategist

It's time for investors to get back into stocks and bonds because inflation has already peaked, according to David Kelly.

Consumer inflation cooled to an annual rate of 8.2% in September from 9.1% in June, which was the highest prices have been in 41 years, and Kelly expects the October report to come in around 8% and for inflation to drop to around 5% in March.

The inflation has peaked. He thinks it is going to fall slowly.

He predicted a 10% gain for European, Japanese, and emerging markets.

I think bonds are back and that this is a good time to be overweight equities for the long term investor. Kelly said that it makes sense to have a slightly below average allocation.

His forecasts come amidst a rough year for markets, which have been wracked by high inflation and the Fed hiking its policy rate to rein in prices. Some market commentators have sounded the alarm for another stock market crash.

Kelly pointed out that political leanings can affect people's perception of the economy. Republicans feel worse about the economy when Democrats are in charge.

If you talk to an economist, they will tell you that the economy isn't in a recession at the moment. It's not true at the moment, but it might be next year. He said how people feel about the economy and what it's doing are two different things.