AP Newsis
Mark Spitznagel, known as the Black Swan investor, warned that the Federal Reserve, the United States’s central bank, is unlikely to lower interest rates before an economic downturn or a stock market crash occurs.
On the 30th, Business Insider (BI) reported that Spitznagel, the Chief Investment Officer (CIO) at Universa Investments, said that a rate cut would not benefit investors, as it would be implemented after an economic downturn or stock market crash.
According to the American CME FedWatch, investors expect the Fed to cut rates 1-2 times this year.
Despite its dovish appearance, he anticipated that the Fed would act hastily to cut rates only after an evident recession.
On Wall Street, it is cautiously optimistic that the economy will continue to grow and inflation will slow for the remainder of the year.
In a survey by the National Association for Business Economics (NABE), most U.S. economic experts expect to avoid a recession this year.
However, high-interest rates risk worsening the financial conditions of households and businesses.
Spitznagel explained, “The U.S. economy was built on low-interest rates,” the interest rate hikes implemented so far will have a delayed effect.
Spitznagel, who advises Black Swan author Nassim Taleb, warned that the U.S. could experience the largest debt bubble in its history, potentially leading to the biggest stock market crash since 1929.
Universa, which invests in unpredictable black swans, recorded a return of 4144% during the COVID-19 pandemic when stocks plummeted.
