The investor has warned of a potential US recession.
The Federal Reserve's rate hikes could cause an economic slump in the US according to the Ark Invest chief investment officer.
The economy seems to be more important to the Fed than its legacy. Deflationary and dangerous signals are being ignored.
The US central bank raised interest rates by 75 basis points last week in order to tame inflation, which hit a four-decade high in May. The Fed Governor refused to rule out another hike.
Economic growth tends to be affected by interest rates. Consumer spending falls when rates rise.
According to Wood, aggressive hikes are not necessary. Two indicators could show that prices are falling.
The prices of gold and lumber are seen as a leading indicator of inflation.
During the past two years, the gold price has dropped from a peak of nearly $2,000 an ounce in 2020 to an average of $1840 an ounce. The lumber price has fallen.
Wood said that fuel prices have probably peaked because Americans are turning to electric cars. One of the main drivers of inflation this year has been the increase in the price of oil.
She said that the equivalent of a highly regressive tax has accelerated the shift to electric vehicles. The shift to electric vehicles will undermine oil prices, according to me.
Wood's portfolio has been badly hit by rising rates. All of Ark Invest's gains have been wiped out by the S&P 500's 23% decline in the year to date.
A portfolio manager at Mario Gabelli's $41 billion firm says to buy 27 stocks that have the pricing power to deliver returns.
All Rights Reserved © 2024
