The Federal Reserve isn't doing its job fighting runaway inflation, and unless the central bank raises interest rates more aggressively, the ongoing stock market sell-off could turn into a full one.
The Federal Reserve was criticized for not being decisive.
Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management, said on Tuesday that the Federal Reserve has lost its credibility because it has failed to stop inflation.
The markets are imploding because investors are not confident that the Federal Reserve will stop inflation, and with consumer prices surging 8.3% on a yearly basis in April.
If the Federal Reserve doesn't take decisive action to tame inflation, the economy will go into a recession and the stock market will crash.
Several current and former Fed officials have waffled and made dovish remarks, suggesting a modest increase in rates and a pause.
The central bank's current monetary policy and forward guidance are setting investors up for double-digit sustained inflation that can only be mitigated by a market collapse or a massive increase in rates.
When the Fed draws a line in the sand on inflation, the current market spiral will end.
The market will do the Fed's job if it doesn't do it.
According to Forbes calculations, Ackman's worth is down from $3 billion earlier this year.
The days of runaway inflation are over, according to Ackman.
The stock market is having one of its worst years on record, with investor sentiment taking a huge hit due to concerns over inflationary pressures and rising rates. The S&P 500 and the tech-laden Nasdaq have lost seven weeks in a row, their longest losing streaks since the 2001 dot-com crash.
The stock market has been selling off as the tech shares have fallen.
How long does it take for stocks to recover from bear markets?
The S&P 500 briefly fell into the bear market.
According to Goldman, the worst case scenario for stocks is.
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