Back in January 2016, when the Dow Jones Industrial Average DJIA, +0.19% was trading around the 16,000 level, Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., said the blue-chip index would topple 25,000 within three or four years. It didn’t take that long.

Now, with the Dow clinging to a 500-point cushion above that milestone, Lamoureux is standing firmly behind another bullish call: Dow 40,000.

Oh, but there’s a catch.

“We see a large panic event taking shape now that continues into next year — the melt-up we forecasted is done,” he told MarketWatch. “Investors should be out of stocks for most of 2019.”

Lamoureux, who moved mostly to cash in the summer, predicts that the stock market could lose a third of its value in the coming year, prompting a “hyperinflation of financial assets at an impressive rate” that ultimately carries the Dow all the way up to 40,000 in the years that follow.

But how, exactly? Lamoureux says the Federal Reserve, which President Donald Trump just described as “loco,” will look to prop up markets.

“The Fed most likely steps up early in 2020 and starts buying shares,” he said.

Last month, IMF chief economist Olivier Blanchard suggested such previously unheard of policies may be needed to combat the next severe recession.

At the moment, the Fed can only buy Treasurys and mortgage-related assets, but, according to Blanchard, the best policy going forward may be for the bank to load up on assets with high premiums like stocks.

“This could do the trick,” he said.

Lamoureux believes it will, indeed, do the trick. But only after a very ugly 2019.