Bill Ackman, the CEO and founder of Pershing Square Capital Management (LSE:PSH), said markets are facing a precarious environment because the Federal Reserve has lost credibility in its attempt to combat inflation.
The CEO tweeted on Tuesday that “inflation is out of control”. He followed on by saying, “Inflation expectations are getting out of control. Markets are imploding because investors are not confident that the Federal Reserve will stop inflation. If the Fed doesn’t do its job, the market will do the Fed’s job, and that is what is happening now. The only way to stop today’s raging inflation is with aggressive monetary tightening or with a collapse in the economy.”
“It ends when the Fed puts a line in the sand on inflation and says it will do ‘whatever it takes.'”
So how is Ackman’s PSH holding up? Prices are sitting well below their highs of 3125, down 20%. Will the share price hold above a strong support area of 2365? We think this level may provide a good entry for a long term hold.
Although Ackman is predicting a huge collapse, he faired well in the March 2020 covid crash. A $27M hedge profited his company $2.6B.
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