Billionaire hedge-fund manager Bill Ackman says the Federal Reserve needs to deliver old-fashioned shock and awe to financial markets with a big rate hike.
Billionaire hedge-fund manager Bill Ackman said the Federal Reserve needs to deliver old-fashioned “shock and awe” to financial markets by delivering a much larger onetime increase to benchmark interest rates to combat inflation.
“The unresolved elephant in the room is the loss of the Fed’s perceived credibility as an inflation fighter and whether 3 to 4 would therefore be enough,” he wrote. Fed Chairman Jerome Powell told the Senate Banking Committee earlier in January that a surge in inflation, rising to highs not seen in about 40 years, came from the imbalance of supply and demand. While the Fed can cool demand, it will get some help as supply constraints ease, he said.
Read: Here’s how the Federal Reserve may shrink its $8.77 trillion balance sheet to combat high inflation, according to a former Fed staffer See: Get ready for the climb. Here’s what history says about stock-market returns during Fed rate-hike cycles.
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