‘Go Full’ On Inflation Transactions If Fed Ignores Price Rise


Billionaire hedge fund manager Paul Tudor Jones told CNBC on Monday he was paying close attention to this week’s Federal Reserve policy meeting in light of recent economic data showing higher consumer prices.

“If they treat these numbers – which were big events, they were very important – if they treat them nonchalantly, I think it’s just a green light to bet heavily on every inflation trade,” said Jones on “Squawk Box”.

“If they say, ‘We’re on the right track, things are going well,’ then I would go all-in on inflation trading. I would probably buy commodities, crypto, gold. added Jones, who called the stock market crash in 1987 and is the founder and chief investment officer of Tudor investment.

On the flip side, Jones predicted that markets would be disrupted if the Fed took a different tone on Wednesday.

“If they’re right, if they say, ‘We have data coming in, we’ve accomplished our mission, or we’re about to accomplish our employment mission very quickly,’ then you’ll get a crisis reduction. of anger, ”Jones said. “You’re going to have a fixed income selloff. You are going to have a stock correction. It doesn’t necessarily mean it’s over.”

The Fed’s two-day policy meeting is scheduled to end on Wednesday, and President Jerome Powell is expected to hold a press conference after the central bank releases his statement at 2 p.m. ET.

Powell and company have maintained their highly accommodative monetary policy approach, which was instituted in response to the coronavirus pandemic. Central bankers have remained steadfast despite criticism that massive bond purchases and near zero interest rates are no longer necessary as the economic recovery is well underway and inflation data is worrying.

Powell and other Fed officials say they believe the price hike is likely temporary as the economy reopens from all kinds of pandemic-related disruption, which in turn justifies their political stance.

“The idea that inflation is transient, for me… that one just doesn’t work the way I see the world,” said Jones, who added he thought the central bank’s views on the inflation put its credibility at risk.

In Monday’s “Squawk Box” interview, Jones also reiterated his favorable view of bitcoin, calling it a “portfolio diversifier” and a “wealth story.” The longtime trader added that he got nervous when considering the valuation of the stock market relative to the overall economy.

“The only thing I know for sure, I want 5% gold, 5% bitcoin, 5% cash, 5% commodity. At this point, I don’t know what I want to do with the other 80% until I see what the Fed is going to do, ”Jones said.


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