By Sam Boughedda
According to Stanley Druckenmiller, the Federal Reserve’s attempt to rapidly unwind the excesses it helped create over a decade of easy monetary policy will not end positively for the American economy. He made the comments at CNBC’s Delivering Alpha Investor Summit in New York City on Wednesday.
The billionaire investor said his “central case is a hard landing” by the end of 2023, adding that he isn’t sure of the timing, but it will certainly be by the end of next year.
“I will not be surprised if it’s not larger than the so-called average garden variety,” Druckenmiller was quoted as saying. However, he also declared that he “doesn’t rule out something really bad.”
Like many others, the famous investor believes quantitative easing and zero interest rates over the past 10 years have created an asset bubble, and now those factors are being reversed, “we are in deep trouble.”
Druckenmiller said the Federal Reserve’s transitory inflation theory was a mistake, and the “repercussions of that are going to be with us for a long, long time,” while the” risk reward of owning assets doesn’t make a lot of sense.”