Top Hedge Fund CEO Calls For Fed To Hit Brakes On Inflation
Key Speakers At The Wall Street Journal D.Live Conference.
Patrick T. Fallon/Bloomberg via Getty Images

Hedge fund manager Bill Ackman called for the Federal Reserve to taper its aggressive monetary policy in order to reduce inflation.

Ackman — who leads the firm Pershing Square Capital Management — told the Federal Reserve Bank of New York last week that “the Fed should taper immediately and begin raising rates as soon as possible.”

“We are continuing to dance while the music is playing, and it is time to turn down the music and settle down,” he explained. 

“As we have previously disclosed, we have put our money where our mouth is in hedging our exposure to an upward move in rates, as we believe that a rise in rates could negatively impact our long-only equity portfolio,” he added.

Ackman’s presentation to the Fed noted that the central bank’s current policy is to “begin tapering shortly but wait on raising interest rates until further evidence of progress on employment and continued inflation.”

With $5.1 trillion in combined fiscal stimulus packages and further “Build Back Better” spending that could equal 10% to 15% of GDP the economy has been abundantly stimulated. As a result, there are 2.8 million more available jobs than workers willing to take them.

The report says that in addition to improved unemployment rates, inflation measures “are substantially higher today than at the beginning of prior rate hike cycles.”

“A ‘wait and see’ approach to raising interest rates creates significant risks given the substantial progress to date on employment and inflation combined with the unprecedented economic backdrop,” argues the report, which also cites warnings from the Bank of England and International Monetary Fund.

Carl Icahn — an influential hedge fund manager and a rival of Ackman — issued a similar warning about the inflationary risks facing the United States economy.

“In the long run we are certainly going to hit the wall,” Icahn said in a recent interview. “I really think there will be a crisis the way we are going, the way we are printing money, the way we are going into inflation. If you look around you, you see inflation all around you and I don’t know how you deal with that in the long term.”

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