Ark Invest CEO and CIO Cathie Wood believes the Fed could get inflation down to 3% in the short-term as commodity prices deflate and the U.S. faces an 'inventory recession.'
"That is what I believe Chairman Powell thinks he needs. And we just don't think that's true because we see so much deflation," Wood said.
"I wouldn't be surprised to see it well down into the threes in the next 3 to 6 months, if not into that two [percent] handle," Wood said. "And I think if we get enough sequential declines, then the Fed will change its tune quite dramatically." "I think they'll change their tune and perhaps they will take interest rates up 75 basis points this time," she continued, "but the next time, 25 to 50 basis points. And then following that, we shall see."and China readjusting to "common prosperity," Wood also predicted GDP profits could feel "tremendous pressure" until costs decline and inventories are cleared.
"We do not think this will be anything like '08 or '09, which I know many people fear," the CEO said. "We think it's much more of an inventory recession and a drag from the rest of the world."
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