Bass, known for his high-risk gamble against subprime mortgages onward to the 2008 financial crisis, advised that the blend will create an environment of "stagflation," a term that emerged during 1970s when both consumer prices and unemployment were high.

During an interview on CNBC's "Power Lunch", Bass said "You have wages up, you have real estate rent moving up, now you have commodities bouncing. So 2017 is going to be a year of increasing inflation but economic growth lagging."

"We're moving into a stagflationary environment in my view," he added.

The Hayman Capital Management founder and CIO said, from an investment standpoint, that the main advice is for investors to stay away from long-duration bonds. Inflation usually causes bond yields to rise and prices to fall, creating capital losses for investors.

Economic growth proved to be sluggish. GDP averaged just 1.1 percent growth during the first half of the year. Third-quarter growth is expected to more promising. Reuters surveyed economists and they said that Q3 GDP is at 2.6 percent, though the Atlanta Fed's forecast is for just 2 percent expansion, a number that had been as high as 3.8 percent.

With an average of hourly earnings of 2.6 percent on annualized pace in September, wages have pushed higher. However, the consumer price index, excluding food and energy, rose at 2.2 percent pace in September.

On the other hand, according to Bass, he is not saying that the market is going to crash. He has few equity holdings, so he had no recommendations on the stock market. However, he furthered that his economic call should not be interpreted as a doomsday prediction for Wall Street.

"I'm just saying it's going to have a real hard time generating positive real returns in the next few years," Bass ended.

Bass has made prominent bets on Japan, European sovereign debt and, most recently, China. He has also given his expectations regarding the economic future of Japan and Argentina.