2023-09-22 12:40:31
The founder and manager of the hedge fund Pershing Square Capital, Bill Ackman, expects interest rates to continue to rise and continues to hold short positions in bonds amid increasing government debt, rising energy prices and costs of the transition to green energy, writes Bloomberg.
“The long-term inflation rate and the real interest rate suggest that 5.5% is an appropriate yield for the 30-year Treasury note,” wrote Akman on social network X (formerly Twitter, the social network is blocked in Russia).
American billionaire investor Bill Ackman is known for his eccentric behavior, thanks to which he has earned a reputation Wall Street’s biggest snob, as well as high-profile and sometimes controversial investments. The most notable case was the investment in defensive instruments before the March 2020 crash. In February Akman hedged Pershing Square portfolio through credit default swaps, which work like insurance. The buyer of this instrument pays the seller of the swaps, who, if the issuer defaults, pays his debt. By properly hedging risks, he turned $27 million to $2.6 billion.
With economic recovery moving faster than expected and infrastructure spending increasing economic growth and public debt, Ackman said forecasts for a recession have been pushed back beyond 2024. He also believes that the inflation rate may not fall as much as US Federal Reserve Chairman Jerome Powell would like.
“The long-term inflation rate will not return to 2%, no matter how much Fed Chairman Powell calls it as a target. It was arbitrarily set at 2% after the global financial crisis, we now live in a completely different world,” he added.
According to the agency, in Friday trading the yield on 30-year Treasury bonds rose to 4.58%, and on Thursday it rose by 13 basis points, which was the highest level since 2011. Bond investors suffered losses for a third year after the US Federal Reserve once again raised its forecasts for future borrowing.
In March of this year, Bill Ackman expressed concern about the state of the US economy, as the Fed continues to raise interest rates, despite the crisis in the banking sector that occurred in the spring. In May he warnedthat the entire regional U.S. banking sector would be at risk unless the Federal Deposit Insurance Corporation (FDIC) took steps to guarantee the deposits of all customers.
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