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Billionaire hedge fund manager Paul Tudor Jones believes the Federal Reserve is done raising interest rates in its fight against inflation, and the stock market could rise this year.
“I really think they’re done,” Jones said Monday on CNBC’s “Squawk Box” of the Fed’s rate hike campaign. “They could probably declare victory now because if you look at the CPI, it’s been down for 12 straight months. … This has never happened before in history.”
The central bank has raised interest rates 10 times since March 2022, bringing the federal funds rate to a target range of 5% at 5.25%, the highest since August 2007. The consumer price index has cooled considerably since peaking at around 9% in June. 2022. The gauge eased to 4.9% in April.
The longtime investor said the current market setup is similar to mid-2006 before the Great Financial Crisis, when stocks rose for more than a year after the Fed stopped tightening policy monetary.
“Stock prices…I think they’re going to keep going up this year,” Jones said. “I’m not bullishly bullish because I think it’s going to be a slow grind.”
Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.
Adam Galica | CNBC
In the short term, the investor said there would be some indigestion due to the fight to raise the US debt ceiling, and he would buy the drop in political volatility.
Jones rose to fame after predicting and profiting from the 1987 stock market crash. He is also president of the nonprofit Just Capital, which ranks US public companies based on social and environmental metrics.
He thinks there’s plenty of dry powder ready to get to work after a particularly dull period for trading activities.
“We have no IPO, no timeline, no secondaries, valuations are at 19 but no one is rushing to offer as clearly, something is going on internally in the stock market,” Jones said. . “From a flow point of view, it’s constructive.”