Bill Ackman warned the Federal Reserve isn’t being taken seriously and suggested interest rates could soar past 5% next year.
“Inflation is out of control and inflationary expectations have become unanchored,” the Pershing Square boss wrote in a Twitter thread on Thursday.
“A prediction: the Fed is serious,” Ackman said. The billionaire investor added that he expects the Fed to hike rates by 75 basis points or more in July, and by 50 basis points or more in subsequent meetings until inflation is clearly decelerating toward the target rate of 2%.
Increasing food, energy, and housing prices fueled an 8.6% rise in the Consumer Price Index (CPI) in May, marking its largest 12-month increase in four decades. Consequently, The Fed reacted to the inflation spike by raising its benchmark rate by 0.75 basis points to between 1.5% and 1.75% earlier this month — its biggest single hike since 1994.
In his Twitter thread, Ackman predicted the federal funds rate would more than triple to over 5% next year.