Bill Ackman warnsthat decades of high inflationwill not return to normal levels soon. We downplayed concerns about recession.He continued to demand high interest rates from the Federal Reserve.
Hedge fund billionaires have previously accused the Fed ofand said inflation was "out of control" because they didn't raise interest rates enough. The story of the recession has taken hold, and has spurred the stock market to sell out, despite some positive signs of the US economy.
Acman said the Fed has little option but to raise interest rates from 4% to 5% (about three times the current level) by next year to curb inflation. According to millionaires, that increase in amount would be enough to "hopefully" lower prices.
"Inflation will not go down soon,"Pershing Square Capital's boss said on Monday.
"While demand has slowed due to the impact of stickers, inflation, and rising interest rates, overall demand remains strong," Ackman added. "Inflation is an embedded, daily experience, headline news, and diner table topic for everyone."
Growth and Price Determining power looks cheap. Remember that the stock market measures the nominal business value. Inflation is damaging business and consumer confidence and slowing growth. Controlling inflation will save the economy in the long run at the expense of short-term suffering.— Bill Ackman (@BillAckman)July 4, 2022
The latest consumer price index, due out next week, shows whether the Federal Reserve's efforts to combat inflation have had the desired effect. Provides the latest views on. The central bank raised benchmark rates in the sharpest clip since 1994 last month, after the consumer price index reached 8.6%, higher than expected, in May.
While discussing the possibility of a recession, Acman argued that a key element of the economy remained strong despite the recent slowdown. He noted higher levels of personal consumption than last year, historically low national unemployment, higher wages and significant household savings.
He said, "There is a supply issue, not a demand issue. This does not seem to prepare for a true recession, despite the favorable definition."
Overall demand is very strong. There is a supply issue, not a demand issue. This does not seem to prepare for a true recession, regardless of the preferred definition. So why did interest rates fall so dramatically, especially short-term interest rates when@federalreserveis— Bill Ackman (@BillAckman)July 4, 2022
Ackman has sharply criticized the Fed's response to inflation and has strongly supported sharp rate hikes to address the issue.
In June, hedge fund giants said Fed Chair Jerome Powell and his colleagues were unable to respond quickly and resolutely to inflation, and investors lost confidence in the plan. He called for aggressive rate hikes in the coming months, "until it becomes clear that inflation has been curbed."