The hike in interest rates triggered by faster growth from U.S. tax cuts may cause the bubble in credit to pop, billionaire hedge fund manager Paul Tudor Jones said.

“We’re going to stress test our whole corporate credit market for the first time,” Jones said Thursday at the Greenwich Economic Forum in Greenwich, Connecticut. “From a markets perspective, it’s going to be interesting. There probably will be some really scary moments in corporate credit.”

Jones, who heads the $7 billion Tudor Investment Corp., said zero and negative interest rates have encouraged excess lending, putting the markets in a perilous condition. He said today’s levels of leverage could be systemically threatening even if policy makers respond appropriately.

“The end of the 10-year run is going to be a really challenging time for policy makers going forward,” he said.

Stocks, bonds, currencies and real estate are all overvalued, he said.

Tudor’s main fund rose 9 percent this year through October, according to an investor document.

The hedge fund manager said the next trade will be a “front-end rates trade” of figuring out when policy makers will cease interest rate hikes. Even though growth may slow through next year, stocks may not take an immediate hit. In other periods when the Federal Reserve paused in its rate increases, stocks reached previous or new highs.

“It doesn’t necessarily mean we have to enter a bear market yet,” he said. "But who the hell knows.”

Jones, whose hedge fund has for years struggled to generate profits and keep investors, said earlier this year that he doesn’t have many macro trades on because the reward and risk have diminished at this point in time.