Paul Tudor Jones Calls Inflation 'Single Biggest Threat' to Financial Markets

Kimberly Redmond  |

Video source: YouTube, CNBC Television

Billionaire hedge fund manager​ Paul Tudor Jones believes inflation will not be going away anytime soon, posing a big threat to the US markets and economy. ​ 

During an appearance Wednesday on CNBC’s “Squawk Box,” Tudor Jones said, “I think to me, the number one issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory. It’s probably the single biggest threat to certainly financial markets and I think to society just in general.”​

The founder and chief executive officer of Tudor Investment Corp said that the trillions of dollars pumped into the economy by the federal government to rescue it from the COVID-19 pandemic will cause inflation to run hotter for longer.

“Inflation can be much worse than what we fear. We have the demand side of the equation... and that is $3.5 trillion greater than what it normally would have been... just sitting in liquid deposits,” Tudor Jones said.

“They can go into stocks, or crypto, or real state or be consumed, so that’s a huge amount of dry powder just sitting waiting to be utilized at some point, which is why inflation is not going away,” he said.

The longtime trader — who predicted and profited from the 1987 stock market crash — expects prices will continue to rise in coming months.

Consumer prices rose 5.4% for the year ending in September — the highest rate since 2008, according to the Department of Labor

Federal Reserve chair Jerome Powell has largely attributed the spike in consumer prices to pandemic-induced disruptions in the supply chain, a shortage of workers that's pushed wages higher and a wave of pent-up consumers flush with stimulus cash.

Powell has maintained the rise in inflation is likely "transitory" and warned against the Federal Reserve lowering the benchmark federal funds rate. 

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Source: Equities News

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