Billionaire investor David Einhorn says the Fed wants stock prices to go down and will hike rates higher than markets expect
Billionaire investor and Greenlight Capital boss David Einhorn is gearing up for a bear market, rejecting hopes that the Federal Reserve will spare stocks when thinking about future policy moves. ."I think it would be better if they cared less about the stock market in either direction."
While a higher-for-longer interest regime has become the general expectation on Wall Street, Einhorn thinks estimates for how far the Fed will hike rates are still too low. He didn't provide an exact estimate, current predictions hold that the Fed's benchmark rate will climb toThe value-focused investor reasoned that an incredibly large fiscal deficit continues to stimulate the economy, while short-term rates were not high enough to match inflation.
"When you take rates down, savers lose income; it's maybe good for financial speculation, but it doesn't it doesn't help people's real personal incomes. And then when you flip that, which is what's happening now, it actually strengthens the consumer position,"."I think that's why people are surprised that the economy is as strong as it is, despite the fact that rates have come up.
Einhorn's investments performed exceptionally well in 2022, yielding a 36.6% return, despite a 19% slide in the S&P 500.
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