The company’s CEO private equity Starwood Capital Group, Barry Sternlicht, questyear continued to criticize the US Federal Reserve.
The billionaire investor said in September that the Fed was using “old data” to attack the economy with an unnecessary rate hike.
Sternlict reiterated his warning this month, saying the economy is “crumbling hard” with rising borrowing costs, meaning a recession is now inevitable.
Sternlict warned again this week in an interview with Fortune that if the Fed continues to raise interest rates, as it did five times quest’year, “the effects will be so devastating that they will put the entire capitalist system at risk,” according to what I saw from Al Arabiya.net.
Sternlicht gave an example: “The rich man who lost 30% of his wealth is still rich, but the poor man who does hourly work and loses it, will curse capitalism and say: it didn’t work for me … I lost work … and this whole system must change it “.
“There will be social unrest, and that’s just because of Jerome Powell and his hilarious band of madmen,” he added.
And Sternlict isn’t the only one worried about an interest rate hike that could produce recession, with economist Steve Hanke telling Fortune the Fed was “incompetent.”
“We may be heading into a period of stagnation or stagnation,” he added, which the president of Queen’s College Cambridge has repeatedly stressed that the Fed was too slow to respond to inflation last year.
Earlier this month, El-Erian said the risk of a recession was now “uncomfortably high” as a result.
For investors, higher interest rates are also affecting stocks, which means the next few years likely won’t be up to par with the 2020-2021 bull market.
Sternlicht believes the Fed is making the decision to raise rates based on lagged inflation data, when it should look at the statistics instead. “in real time “and talk to CEOs on the ground.
The billionaire, who founded the Starwood Property Trust, which owns nearly 250,000 residential properties in the United States, said rents are “slowing down” across the board, but the consumer price index (CPI) still takes into account rent increases that have occurred since More than 6 months.
Sternlicht cited the decline in material prices prime as evidence of the easing of inflation, with the Commodity Index (CRB), a broad measure of commodity prices prime global, in 20% drop from the July high.
The investor added that he believes the Fed has missed the opportunity to eliminate inflation in 2021 and is now trying to remedy the mistakes of the past, but stressed that the two mistakes do not correct each other.
Sternlecht believes the Fed should stop its rate hikes and wait for the effect across the economy before deciding what to do next.
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