The U.S. Federal Reserve is "trapped", says Michael Gentile, strategic investor.

Gentile told David Lin, anchor for Kitco News, that two scenarios could play out: either the Fed raises rates by 25 basis points next year to regain confidence in the markets, or they let inflation run hot and do nothing.

Neither of these scenarios will be enough to contain inflation. In order to really "go to war" against inflation, the Fed will need to raise rates to at least 3%, which would cause stocks to crash by the order of 50%. Even a 25 basis point raise would trigger a 10-20% correction, Gentile said.