Billionaire Bill Ackman Predicts Multiple Interest Rate Cuts, Urges the Fed to Act Swiftly
Billionaire investor Bill Ackman believes that the Federal Reserve needs to cut interest rates as data indicates a decrease in inflation. In an interview with CNBC, the founder and CEO of hedge fund Pershing Square Capital Management predicts that the Federal Reserve will announce three rate cuts of 25 basis points at minimum.
Ackman argues that the cost of capital is currently high and a rate cut is necessary to prevent an economic contraction. He suggests that three rate cuts would only amount to a 15% reduction in rates, which is not significant given the cooling inflation. However, he believes that the Fed may need to make more than three cuts.
Ackman also suggests that if the Fed quickly reverses its tight monetary policies, it could lead to a stock market rally and potentially avoid a recession.
Barclays Supports Ackman’s Prediction
Barclays, a banking giant, also anticipates interest rate cuts by the Federal Reserve this year. The bank predicts that the Fed will start slashing rates in March by 25 basis points at alternate meetings.
Hot Take
Billionaire investor Bill Ackman expects multiple interest rate cuts from the Federal Reserve as inflation cools down. He emphasizes that these cuts are necessary to prevent an economic contraction. Moreover, Barclays supports this prediction and anticipates rate cuts starting in March. If implemented swiftly enough, these rate cuts could potentially lead to a stock market rally and avoid a recession.
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