Bill Ackman, the billionaire and manager of the Pershing Square hedge fund, says stocks will soon be a ‘buy’. He points out that the American Federal Bank, the Fed, is “doing what it needs to do” to fight inflation, although Ackman himself would like to see the Fed be more hawkish in its interest rate decisions, when a few months ago he even wrote that interest rate increases of 100 basis points (ie 1 %) will be even “better”.
Where will inflation be in a year?
Ekman predicts that inflation in the US will drop “a lot”, maybe even to 3.5-4% (compared to 8-5-9% it is now). “I think inflation is going down. As soon as people realize that the Fed does not have to keep raising the interest rate and will soon lower the interest rate – this will be a buy signal for the markets.”
He expects Fed Chairman Jerome Powell to keep interest rates higher for longer: “I think they said they were going to. What they should do is raise the interest rate and leave it there for an extended period. Our biggest concern is inflation, which is why we wanted the Fed to raise interest rates.”
Since the beginning of the year, US stock indices have lost 14-26% with the Nasdaq leading with a 26.5% drop, the S&P500 with a 18% drop and the Dow Jones with a 14% drop.
Goodelman Sachs: The US is on its way to a “soft landing”
Goodman Sachs Bank also believes that the American market is headed in the right direction. According to the bank’s chief economist, Jan Tzius, “It is too early to declare victory, but Federal Reserve Chairman Jerome Powell is well on his way to steering the US economy to a soft landing.” Since the FOMC began raising the funds rate at the beginning of the year , we said the U.S. economy could reach a soft landing, although the path is narrow. This requires continued below-trend growth, a rebalancing of the labor market through a sharp decline in jobs and jobs, along with a moderate increase in unemployment and a large drop in inflation. Although much can still go wrong and our probability That a (mild) recession will start in the coming year is still 1:3, we see some encouraging signs that the economy is moving towards all three of these goals.”
According to the economist: “Adjustment of growth is the furthest away. The slowdown initially came as a result of reduced fiscal support and much higher food and energy prices, and now the rise in mortgage interest is hurting the housing market. The labor market is also adjusting. The labor force participation rate rose in August, offsetting the declines of the previous months. While wage growth is starting to slow down, and the number of jobs is decreasing.”
And what about inflation?
According to Hatzios, “a sharp drop in commodity prices, the strengthening of the dollar and a major improvement in supply chain disruption, all of these indicate that commodity price inflation will continue to decline. He believes that services inflation will take longer to moderate, but even there, a recent slowdown in the asking price for rent should appear in the data in the coming months.
According to him, the recent decline in risk assets (i.e. stocks) has improved the risk outlook for the near term, although a large increase may face the same constraints as early rebounds. “Our strategists still expect the markets to remain limited in their range of movement.”
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