Billionaire Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that the US economy will implode, stressing that interest rates must come down. He further stressed that the economy “will have a hard landing”.
Barry Sternlicht on Hard Landing, Economic Implosion
Starwood Capital Group Chairman and CEO Billionaire Barry Sternlicht discussed the state of the US economy in an interview with CNBC on Thursday.
Following the Federal Reserve’s 25 basis point (bps) hike in interest rates on Wednesday, Sternlicht reiterated that the Fed should have stopped raising interest rates, citing the banking crisis. Recently, several major banks have failed, including Silicon Valley Bank and Signature Bank.
“I think we need to lower the prices. That’s how we recapitalize the banks. I think they’ve done enough,” Sternlicht said, adding:
The bond market tells you what is going to happen. The bond market is right. Interest rates must come down. The economy will implode.
Last week, billionaire Jeffrey Gundlach, aka the “King of Bonds,” also explained how the bond market is signaling that the Federal Reserve will soon cut interest rates significantly.
Claiming that Federal Reserve Chairman Jerome Powell is “using a steamroller to drive down the price of milk two cents, to kill a little fly,” the CEO of Starwood Capital pointed out, “You don’t need to see the car hit the wall to know it’s going 8,000 miles an hour and it will hit the wall.
The economy will experience a “hard landing”.
Some people think there will be a hard landing in the United States, while others expect a soft landing or no landing at all. Recently, economist David Rosenberg examined the outlook for manufacturing activity from the Federal Reserve Bank of Philadelphia since 1968 and concluded that the United States appears to be headed for a “hard landing.”
Many people believe that the Federal Reserve will very soon lower interest rates, including Gundlach. However, Fed Chairman Jerome Powell said rate cuts were not part of the Fed’s base case, pointing out that inflation was still too high. Meanwhile, economist and gold scientist Peter Schiff has warned that inflation is about to get worse and the cost of living for Americans will skyrocket.
Do you agree with billionaire Barry Sternlicht? Let us know in the comments section below.
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