Billionaire investor Barry Sternlicht said inflation in the US could turn negative by the middle of this year. The risk is that the Fed will continue to raise interest rates.

‘Inflation will be negative in May or June, because the housing equivalent is showing a positive sign. the risk is [that Fed chief Jerome Powell] keep.’

— Barry Sternlicht, CEO, Starwood Capital Group

Billionaire Barry Sternlicht, chief executive officer and chairman of real estate investor Starwood Capital Group, predicts the US economy will slip into a recession in the third or fourth quarter of 2023 as the Federal Reserve raises interest rates. rates to combat inflation, even if rate inflation, he said, could go into negative territory by the middle of this year.

In an interview with CNBC’s “Squawk Box” on Thursday, the billionaire investor said housing costs, the biggest component of inflation, could fall this year, which would help bring the inflation rate down to the 2% level that the Federal Reserve targeted for a long time, and the consumer price index may even show prices falling in May or June.

MarketWatch reported earlier this month that economists at Goldman Sachs see core inflation falling faster than anticipated due to falling apartment rents, based on monthly rental activity since 2021. However, the “main” rent measure The central bank’s annual “haven” cost – the cost of shelter – is still rising. Housing cost, which is the largest component of CPI, up 0.8% in December, while its annual gain rose to a new 40-year high of 7.5% from 7.1%, the Bureau of Labor Statistics reported.

Sternlicht warned last year that Global economy will “collapse” if the US central bank does not stop raising interest rates. He also said the Fed should pause to assess the impact of a rate hike on the economy because it has done “enough” to contain inflation. The Fed has launched seven consecutive rate hikes for 2022 to raise the target range for the federal funds rate to 4.25% to 4.5%, the highest targeted fund rate since 2012. 2007.

Earlier this week, Cathie Wood, CEO of Ark Investment Management, said market outlook 2023 that inflation will eventually fall to 2% and predict that it could be negative due to the continuously shrinking money supply.

US stock indexes end higher on Thursday after the GDP report showed fourth quartUS economic growth slightly stronger than economists expected, boosting Wall Street’s optimism about the outlook for the economy. Dow Jones Industrial Average

ended up 0.6%, while the S&P 500

up 1.1% and Nasdaq Composite

increased by 1.8%.


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