The Silicon Valley Bank crisis will force the Fed to slash rates by 100 basis points to prevent contagion, market guru says

• The Silicon Valley Bank crisis may force the Fed to slash rates this year, Larry McDonald said.
• The market guru told CNBC on Friday he expects 100 basis points of easing by December.
• "In essence, the Fed is causing this bank run," he said, referring to earlier steep rate hikes.

The Silicon Valley Bank meltdown may incite the Federal Reserve to cut rates by 100 basis points by December to prevent contagion in the financial system, Larry McDonald said.

That would mark a sharp reversal from the central bank's current course of aggressive tightening to rein in inflation.