Bill Ackman says inflation will only dissipate if the Federal Reserve acts more aggressively. Ackman: "There is no prospect for a material reduction in inflation unless the Fed aggressively raises rates" The Pershing Square hedge fund manager attributed 2022's market correction to investors' lack of confidence that the central bank could squash a 40-year high in inflation.

"If the Fed doesn't do its job, the market will do the Fed's job," Ackman says. The market has been in a big rout this year as the Federal Reserve's tightening measures to tame inflation stoked fears of a recession. The central bank raised its benchmark interest rate by half a percentage point earlier this month.

The S&P 500 is down about 18% in 2022. Ackman believes at this point investors will cheer the Fed raising rates more rapidly. The Fed has indicated similar 50 basis point rate increases are likely at its next few meetings. The rate is currently targeted at 0.75%-1%.

The rate-setting Federal Open Market Committee next meets June 14-15. In March 2020 during the depths of the Covid pandemic, Ackman issued a dire warning on CNBC about the health crisis. He made $2 billion betting against the market then. The Fed's next meeting is on June 14.
Posted by CA carly
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