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Bill Ackman, A Hedge Fund Manager, Anticipates A Rise In US Long-Term Rates

Texas Job Market Hits New Heights, 13 Consecutive Months of Job Growth! (Photo: Stacey Lane)
Texas Job Market Hits New Heights, 13 Consecutive Months of Job Growth! (Photo: Stacey Lane)

Despite the fact that his Pershing Square Capital Management hedge fund is still short on bonds, billionaire investor Bill Ackman predicted that 30-year interest rates would continue to increase as long as inflation remained stubbornly high.

Job Loss

He made his remarks after the U.S. Federal Reserve maintained interest rates while adopting a more hawkish monetary policy, which its officials are growing to feel has the potential to cut inflation without seriously harming the economy or causing significant job losses.

Ackman wrote on the social networking site X, formerly known as Twitter, “The long-term inflation rate is not going back to 2% no matter how many times Chairman Powell reiterates it as his target.” Ackman cited the strike by auto workers as an inflationary.

“Outsourcing production to China had long-term deflationary impacts are no longer present. The bargaining power of employees and unions is growing, he wrote in the post on Thursday. He also emphasised the consequences of growing energy costs.

Increase In The Intrest Rate

Bill Ackman

Source: ABC News

According to updated quarterly predictions provided by the U.S. central bank, the Fed’s benchmark overnight interest rate may still be increased one more time this year to a high range of 5.50%-5.75%, and rates are expected to remain much tighter through 2024 than originally anticipated.

He stated that 5.5% is a reasonable yield for 30-year Treasurys, adding that he was shocked at how low long-term rates are. “The long-term inflation rate plus the real rate of interest plus term premium suggests that 5.5% is an appropriate yield for 30-year Treasurys,” he remarked. The 30-year Treasury yield increased to its highest level ever on Thursday at 4.55%.

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