Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday that he’s paying close attention to the Federal Reserve’s policy meeting this week in light of recent economic data showing higher consumer prices.

“If they treat these numbers — which were material events, they were very material — if they treat them with nonchalance, I think it’s just a green light to bet heavily on every inflation trade,” Jones said in an interview on “Squawk Box.”

“If they say, ‘we’re on path, things are good,’ then I would just go all in on the inflation trades. I’d probably buy commodities, buy crypto, buy gold,” added Jones, a prominent Wall Street figure who called the stock market crash in 1987. He’s the founder and chief investment officer of Tudor Investment Corporation.

On the other hand, Jones predicted that markets would be unsettled if the Fed comes out with a different tone Wednesday.

“If they course correct, if they say, ‘We’ve got incoming data, we’ve accomplished our mission or we’re on the way very rapidly to accomplishing our mission on employment,’ then you’re going to get a taper tantrum,” Jones said. “You’re going to get a sell-off in fixed income. You’re going to get a correction in stocks. That doesn’t necessarily mean it’s over.”

The Fed’s two-day policy meeting is scheduled to conclude Wednesday, and Chairman Jerome Powell is set to hold a news conference after the central bank releases its statement at 2 p.m. ET.

Powell and company have maintained their highly accommodative monetary policy approach, which was instituted in response to the coronavirus pandemic. Central bankers have been steadfast despite criticism that massive bond buying and near zero interest rates are no longer necessary because the economic recovery is well underway and inflation data is concerning. 

Powell and other central bank officials say they believe rising prices are likely temporary as the economy reopens from all manner of pandemic-related disruptions, which in turn justifies their policy stance.

“The idea that inflation is transitory, to me … that one just doesn’t work the way I see the world,” Jones said.