‘Markets are imploding’ because the Fed isn’t doing its job, says billionaire investor Bill Ackman

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,‘How does this downward market spiral end? It ends when the Fed puts a line in the sand on inflation and says it will “do whatever it takes”.,

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–Bill Ackman, Founder and CEO, Pershing Square Capital

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Hedge-fund billionaire Bill Ackman took to Twitter on Tuesday, blaming a timid Federal Reserve for not doing enough to signal to investors that it is committed to getting inflation under control. He argued that the Fed should pledge to do “whatever it takes” and follow it up with a series of aggressive rate hikes.

Read the full thread for a taste. Ackman’s opinion is that the Fed, despite raising 50 basis points, or half a percentage point earlier this month, is likely to remain well behind, despite indicating a hike of at least two and a half points in upcoming meetings. is ready. Curve.

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“Over the last day, various current and former Fed members have waffled and made lewd remarks proposing a pause in rate hikes and declines,” he said. “The Fed has already lost credibility for its misinterpretation and late pivot on inflation.”

Atlanta Fed President Rafael Bostic said on Monday that a September pause in rate hikes could make sense for a reassessment, according to news reports,

Pushing the fed-funds rate to minus 300 basis points, while inflation is running above 8% year over year and unemployment is at 3.6%, is a recipe for double-digit inflation that would otherwise be “just a market collapse or forest fire.” could be surrounded by a huge increase in rates,” Ackman said.

Ackman’s comments came after stocks fell sharply on Tuesday, seeing renewed pressure after Monday’s surge. Dow Jones Industrial Average DJIA,
-0.78%
was down 330 points, or 1%, while the S&P 500 SPX,
-1.73%
Slipped nearly 2% to trade just below 3,900 – closing below 3.837.25 would see the large-cap benchmark officially entering a bear market. Nasdaq Composite Comp,
-3.10%,
The one that entered a bear market earlier this year was down more than 3%.

“Markets are bursting because investors don’t trust that [Federal Reserve] Will stop inflation,” he tweeted. And as a result, the market is doing the Fed’s work for it.

Credit: www.marketwatch.com /

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