Steve Cohen says the Fed may have a hard time getting inflation down to its goal

US Markets
Wednesday, April 3rd, 2024 3:02 pm EDT

In a recent interview with CNBC’s Andrew Ross Sorkin on “Squawk Box,” billionaire hedge fund manager Steve Cohen shared his skepticism regarding the Federal Reserve’s ability to rein in inflation to its 2% target. Cohen highlighted the challenges posed by recent data showing unexpected increases in inflation during the first quarter of the year, leading to concerns among economists and traders about the persistence of inflation above the Fed’s target. Cohen attributed part of this concern to the prevalence of “underemployment” in the country, suggesting that continued economic growth could exacerbate inflationary pressures by tightening the labor market and driving up wages. Despite these worries, Cohen indicated his agreement with market estimates of three rate cuts this year, citing the contained nature of inflation thus far. Regarding the stock market, Cohen expressed confidence, dismissing comparisons to the dotcom bubble of 1999 and attributing the current rally to investors’ anticipation of future growth driven by artificial intelligence (AI). Cohen emphasized the significance of AI as a “durable theme” poised to impact a wide range of industries, warning companies that neglect to integrate AI into their strategies may face challenges in the future. Cohen’s remarks reflect his extensive experience in successful stock trading, gained during his tenure as a hedge fund manager at S.A.C. Capital, before its closure following a regulatory probe, and as the owner of the New York Mets.

For the full original article on CNBC, please click here: https://www.cnbc.com/2024/04/03/steve-cohen-says-the-fed-may-have-a-hard-time-getting-inflation-down-to-its-goal.html