Billionaire investor Bill Ackman fears the US market is heading for a hard landing if the Federal Reserve fails to cut interest rates.
Like the UK, America’s central bank has been battling inflation by raising interest rates.
The medicine appears to be working, with inflation down to around 3%, but the consensus of financial analysts believes the Fed will not start cutting interest rates until the summer of next year.
Too late, suggests Mr Ackman in an interview with Bloomberg’s The David Rubenstein Show: Peer-to-Peer Conversations.
“I think there’s a real risk of a hard landing if the Fed doesn’t start cutting rates pretty soon,” Mr Ackman suggests.
Adding that if the Fed keeps rates in the roughly 5.5% range when inflation trends below 3%, “that’s a very high real rate of interest.”
Mr Ackman is the founder of Pershing Square, which has assets worth $17 billion under management.
His backing for Bremont was not through Pershing Square, but a personal investment.
A funding round of £48.4 million reported in January this year was backed by Mr Ackman and existing investor New York-based Hellcat Acquisitions LP.
The deal valued Bremont at around £100 million.
Mr Ackman is not alone in cautioning that the US market is cooling.
Danny Govberg, chairman of The 1916 Company, believes the watch market will descend from an all-time high since 2020 to a more normal cruising speed in the new year.