Bill Ackman says his firm is holding onto its stock picks as it anticipates Fed rate hikes cutting inflation to more than half current levels

Bill Ackman, a billionaire hedge fund manager, said he expects inflation to be halved by next year.

According to the CEO and founder of Pershing Square Capital, the central bank has more rate increases in the works. The Fed funds rate has been raised four times this year.

"I think what they're going to do, they have to do, which is raise rates to something in order of 4% or maybe a little bit more, and keep them there for a long time." He hoped that inflation would come off.

There are signs that inflation is coming down. Hopefully it's three and a half percent. He said that it was on its way down and that it would be 12 months from now.

A drop in gasoline prices helped pull headline consumer price inflation to 8.5% in July, from June's 9.1% rate which was a 41- year high. The rate of inflation is well past the Fed's target.

The Federal Reserve Chairman's speech at Jackson Hole three weeks ago signaled that interest rates will remain elevated as it fights to keep inflation in check.

Ackman said that they own the same companies they've owned in the beginning of the year, without a new investment. I wanted the Fed to raise rates quickly because I was worried about inflation.

Some of the companies in the portfolio include Canadian Pacific Railway, Howard Hughes Corp., and Restaurant Brands International. The firm sold off its stake in Domino's Pizza.

The Federal Reserve had lost credibility in its attempt to confront inflation, according to Ackman. The markets are imploding because investors don't think the Federal Reserve will stop inflation.

As of Monday, the national average for gas was at $3.77 a gallon, down from $4.06 a year ago. The report on the consumer price index is due on September 13

The Federal Reserve is expected to raise interest rates by another 75 basis points on September 20-21. The Fed Funds rate is between 2% and 2.5%.