Billionaire investor Leon Cooperman said on Tuesday that rising oil prices or the aggressive tightening of the Federal Reserve will lead the US economy to a recession next year, and that could mean a 40% drop for the S&P 500 from high to low. “I think we’re going to have a recession and profits are going to fall. In a typical recession, profits are going down 20%,” Cooperman told CNBC’s “Squawk Box.” “I think the price of oil or the Fed will lead us to a recession next year. I think there is too much liquidity in the system to experience a recession this year.” The chairman and CEO of the Omega Family Office said he remains a long-term bearer due to “very inadequate” fiscal and monetary policies. He said he believes the unprecedented stimulus has driven demand and created an artificial situation in the economy. The veteran investor hopes that low yields may be the norm for the foreseeable future, as the central bank continues to fight rising prices. “I’m more invested than I want to be, so I’ve been a strong seller and not a weak buyer. long period of low yields as we try to tidy up this ship, “Cooperman said. The S&P 500 was down nearly 4% on Monday to a new year low of 3,749.63. The benchmark is now around 21% of its record, back in the bear market territory after briefly trading intraday about three weeks ago. “If I’m right we’ll end up in recession, yes, but it won’t happen this year,” Cooperman said when asked if the S&P 500 will go down 40% if a recession hits. “I think this year’s minimum is probably not materially below where we are … I think being conservative, being prudent is the right approach … I think the bottom line is not yet.”