Billionaire hedge fund billionaire Bill Ackman said on Tuesday that investors will be closely watching the Federal Reserve to decide when to buy back shares. The founder of Pershing Square told CNBC’s “Squawk Box” that stocks could recover once the central bank stops raising interest rates and the market is confident that inflation is trending in the right direction. “Once people realize that the Fed doesn’t need to keep raising rates and will cut rates soon, that’s a buy signal for the markets,” Ackman said. “I think the question is how far ahead the market predicts that outcome. I think if people see an 8.5% drop in inflation, you start to see a pretty strong continuation trend, then I think people will expect the Fed to ease at some point.” “But what they’re not going to do is bring rates up to 4% and see good inflation and start lowering rates again. They’re not going to make that mistake. “, he added. Stocks have struggled this year as inflation soared to a four-decade high and the central bank aggressively raised interest rates. The market had a mid-summer rally as some investors began pricing in a potential policy pivot, but stocks have since fallen for three straight weeks in part due to blunt promises. anti-inflation from Fed Chairman Jerome Powell during a speech in Jackson Hole, Wyoming. Ackman has said several times this year that the central bank should focus on fighting inflation, calling rising prices the biggest threat to the US economy. Ackman said Tuesday that there are “signs” that inflation is now cooling. Inflation for July showed price gains were slowing, helped by a drop in gas pumps. The next Fed policy meeting is September 20-21. According to CME FedWatch, the market is expected to rise 3/4 percentage point.