Bulletin
Investor Alert

New York Markets Open in:

Key Words Archives | Email alerts

May 24, 2022, 6:32 p.m. EDT

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

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Dow Jones Industrial Average (DJIA)
  • X
    S&P 500 Index (SPX)
  • X
    NASDAQ Composite Index (COMP)

or Cancel Already have a watchlist? Log In

By William Watts

That’s hedge-fund billionaire Bill Ackman sounding off on Twitter Tuesday, blaming a timid Federal Reserve for not doing enough to signal to investors that it’s committed to getting inflation under control. The Fed must pledge to do “whatever it takes” and follow it up with a series of aggressive rate increases, he argued.

Read the whole thread for the flavor. Ackman’s beef is that the Fed, despite raising rates by an outsize 50 basis points, or half a percentage point, earlier this month and signaling at least two more half-point hikes are in store at coming meetings, is set to remain well behind the curve.

“In the last day or so, various current and former Fed members have waffled and made dovish remarks proposing a modest increase in rates and a pause in the fall,” he said. “The Fed has already lost credibility for its misread and late pivot on inflation.”

Atlanta Fed President Raphael Bostic on Monday said a September pause in rate increases to reassess could make sense, according to news reports .

Pushing the fed-funds rate up by 300 basis points from near zero while inflation is running above 8% year over year and unemployment stands at 3.6% is a recipe for double-digit inflation that can otherwise “only be forestalled by a market collapse or a massive increase in rates,” Ackman said.

Ackman’s remarks came as stocks fell sharply Tuesday, seeing renewed pressure after a Monday bounce. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.68% was down 330 points, or 1%, while the S&P 500 /zigman2/quotes/210599714/realtime SPX +3.06% slumped nearly 2% to trade just below 3,900 —- a finish below 3.837.25 would see the large-cap benchmark officially enter a bear market. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +3.34% , which entered a bear market earlier this year, was down more than 3%.

“Markets are imploding because investors are not confident that the [Federal Reserve] will stop inflation,” he tweeted. And as a result, the market is doing the Fed’s job for it.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,500.68
+823.32 +2.68%
Volume: 470.38M
June 24, 2022 5:05p
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
3,911.74
+116.01 +3.06%
Volume: 3.46B
June 24, 2022 5:05p
loading...
/zigman2/quotes/210598365/realtime
US : Nasdaq
11,607.62
+375.43 +3.34%
Volume: 8.68M
June 24, 2022 5:16p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.