The global sell-off in equities could end up being a mere “growth scare,” according to Fundstrat managing partner and head of research Tom Lee. “I think a lot of this depends on whether financial conditions in the U.S. start to tighten, meaning do markets start to seize up?” Lee told CNBC’s ” Squawk Box ” on Monday. “But with interest rates falling and the consumer still in pretty good shape, I think on the other side of this it’ll look like a growth scare.” Stocks are selling off on Monday after last week’s sharp declines , fueled by recession worries following a weaker-than-expected U.S. jobs report . The fallout pushed the Nasdaq Composite into a correction on Friday and also spurred panic that the Federal Reserve waited too long to cut benchmark interest rates. The turmoil has spilled over to Asia, where Japan’s Nikkei index plummeted 12.4% in overnight trading. Meanwhile the Cboe Volatility Index , or VIX, climbed to its highest level since 2020 on Monday. The index, known as Wall Street’s “fear gauge,” has more than doubled to above 50 since Friday, when it stood at roughly 23. For his part, Lee has been one of Wall Street’s more bullish market commentators . He most recently called for a post-central bank market rally last week that came to fruition. Lee has also predicted that the small-cap Russell 2000 index would surge 50% in 2024. But Lee opined that the sharp spike in Wall Street’s fear gauge may suggest that a return to investor confidence could be over the horizon. “We have over three days where suddenly markets reversed, [and] declines like that are generally symmetric but you have to watch the VIX,” Lee said. “When the VIX peaks and starts to roll over and falls down, the recovery can be just as quick.” The true source of the growing weakness in global equities could be rooted in the Bank of Japan’s move to raise its benchmark interest rate to its highest level since 2008 last week, Lee noted. Investors are also positing that markets are witnessing the unraveling of the so-called “carry trade,” due to the yen rising in value against the greenback, which could threaten the ability of traders to borrow the cheaper currency to buy other assets around the globe. “The 2-year [Treasury] is signaling the the Fed is behind, but it does seem like as we look back… this is from the surprise hike from Japan and the sort of knock-on effects from there,” Lee said. “If that is the primary source of the reaction, I know its going to be tumultuous for markets but for the U.S. economy it’s not necessarily bad news.” Lee pointed to a still-robust consumer and cooling inflation data as reasons to remain optimistic toward the current weakness in markets. However, investors will likely witness “a range-bound market at best” between now and October, he said.