tl;dr
Billionaire hedge fund manager Bill Ackman urges the Federal Reserve to cut interest rates soon due to a weakening US economy. He attributes the slowdown to tariffs imposed by President Trump on April 2nd, which created uncertainty and caused businesses to pause. Ackman believes the first quarter's ...
Billionaire hedge fund manager Bill Ackman urges the Federal Reserve to cut interest rates soon due to a weakening US economy. He attributes the slowdown to tariffs imposed by President Trump on April 2nd, which created uncertainty and caused businesses to pause.
Ackman believes the first quarter's positive results were due to frontloading purchases ahead of tariffs, but expects economic deceleration in the second quarter. He stresses the importance of resolving tariff issues quickly to stabilize the economy.
Despite Ackman's call for a rate cut, the CME Group's Fed Watch Tool indicates a 95.2% chance the Federal Reserve will keep rates unchanged at its May 7th meeting. The Federal Open Market Committee is expected to announce its decision then.
In his remarks, Ackman pointed out that President Trump’s April 2nd tariffs, dubbed “Liberation Day,” aimed to revitalize domestic manufacturing by imposing sweeping tariffs on foreign goods and reciprocal tariffs on nations with unfair trading practices. However, this has resulted in hesitation among businesses, leading to a slowing economy.
Ackman summarizes: “Q1 benefited by some frontloading of purchases and a bit of tariffs. The uncertainty associated with Liberation Day has caused many businesses to pause and wait to see what’s going to happen, and that’s going to be reflected in Q2. There’s definitely a deceleration in the economy now, absolutely. I think what’s important is that tariffs get resolved in the relative short term.”