Billionaire hedge fund manager Bill Ackman is skeptical of the Federal Reserve’s ability to keep inflation down and sees structurally high prices lingering. “Long-term interest rates are well below expectations and we see this as a risk for equities, of course,” Ackman said on Pershing Square Holdings’ quarterly investor conference call on Thursday. “Part of our argument here is that we believe inflation will be structurally higher than it has been.” Approved the hike, bringing the benchmark interest rate to the 3.75% to 4% range, the highest level in 14 years. The consumer price index is showing signs of easing, with a weaker-than-expected rise in the gauge in October. CPI rose 7.7% year-on-year, he rose 0.4% in October. Despite the economic slowdown, inflation remains well above the Fed’s 2% target, and several areas of the report show that the cost of living remains high. “I think it is unlikely that the Federal Reserve will be able to bring inflation back to a steady 2% level,” Ackman said. “Eventually, we will have to accept higher levels of inflation.” The investor said a series of factors, including geopolitical risk, rising wages and supply chain disruptions, would force the entire management team to slash production. said he believes it has made him reconsider outsourcing. “We strongly believe in the proposition of more businesses moving closer to home, and it costs money to do business here,” he said. “We believe there are several structural reasons why inflation has persisted longer than expected,” he said. Ackman revealed that his portfolio is still hedged against interest rate and currency risks. A hedge fund manager at Pershing Square has previously urged the Fed to step aside from rising inflation by aggressively raising rates. In March 2020, during the height of the Covid pandemic, Ackman issued a dire warning on his CNBC about the health crisis, saying “hell is coming” and telling the White House that he would shut down the country for a month. I begged you. He then made a $2 billion bet against the market. At the end of the third quarter, Pershing’s Square His hedge fund top holdings included Lowe’s, Chipotle, Restaurant Brands, Hilton and Canadian Pacific Railroad.
Bill Ackman doubts the Fed can tame inflation, says higher prices ahead