GMO’s Jeremy Grantham predicts that in five years the U.S. market may be 20% lower but that due to a “series of advances and retreats” rather than due to a sharp crash. This according to a recent article in The Economist.

The article reports that Grantham, who is known for his caution regarding long-term returns, “caused a stir earlier this year when he said the chances were high of a melt-up in the markets this year.” Recent volatility has dampened his expectations on this score, Grantham believes, due in part to current trade tensions.

Up until now, Grantham says, the market has been doing well due to a combination of low inflation and high profits. But the question remains why profits have been high, the article states, adding, “this may well be down to growing monopoly power in the corporate sector.”

The article outlines possible causes for a market retreat, including rising inflation and interest rates (both nominal and real) as well as wage pressures and lower global equity and bond returns. “The best hope for investors,” the article concludes, “lies in emerging markets which are cheap relative to U.S equities but not as cheap as they were.” While a melt-up could still happen, Grantham says that the longer-term outlook is “desperately unexciting.”