Despite two days of rebounds, stock and bond prices remain well below their levels of early last week, and more declines are likely, says Larry Kudlow, host of "The Kudlow Report" on CNBC and a Moneynews Insider.

Federal Reserve Chairman Ben Bernanke's comments that the Fed may start tapering its quantitative easing (QE) later this year pushed the markets down. And actual tapering would only make things worse, Kudlow said in an exclusive interview with Newsmax TV.

"We’re, certainly, going to have an intermediate[-term] bear market in bonds," he said.

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If the Fed ends its QE in the next 12 months, interest rates will head higher, Kudlow said. "As a rough approximation, you’re looking at a 3.5 percent 10-year Treasury yield. . . . Maybe it could go to 4 percent." The 10-year yield stood at 2.47 percent Thursday.

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To be sure, with inflation so low, bonds won't crash, he says.

The stock market will remain under pressure too.

"Corporate profits are a little slower right now, so that probably doesn’t bode all that well for the stock market if the Fed goes through this tapering exercise," Kudlow said. But he's not extremely negative on stocks either.

"I don’t want to get too bearish," Kudlow said. "All I'm saying is stocks and bonds are correcting. The Fed is probably an important factor behind that correction. I would be very wary as an investor."

More from the exclusive Newsmax TV interview:

• Kudlow to Moneynews: 'I Don't Want to See the Fed Get Aggressive'

• Kudlow to Moneynews: 'Government Has Been Obstacle to Economy'

• Kudlow: GOP Must Become 'Welcoming Party' to Immigrants