Billionaire Barry Sternlicht, Chairman and CEO of Starwood Capital Group, has warned that the US economy is going to implode and stressed that interest rates have to come down. He further stressed that the economy “will have a hard landing.”
Barry Sternlicht on crash landing and 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.
After the Federal Reserve raised interest rates by 25 basis points (bps) on Wednesday, Sternlicht reiterated that the Fed should have stopped raising interest rates, citing the banking crisis. Several major banks recently failed, including Silicon Valley Bank and Signature Bank.
“I think we have to lower the rates. This is how banks are recapitalized. I think they have done enough,” Sternlicht opined, adding:
The bond market is telling you what is going to happen. The bond market is right. Interest rates have to come down. The economy is going to implode.
Last week, billionaire Jeffrey Gundlach, also known as the “king of bonds,” also explained how the bond market indicates that the Federal Reserve will cut interest rates substantially soon.
Stating that Federal Reserve Chairman Jerome Powell “is using a steamroller to bring the price of milk down by two cents, to swing a little fly,” the CEO of Starwood Capital emphasized: “You don’t need to see the car hit the wall to know you’re going 8,000 miles an hour and you’ll hit the wall.” He warned:
The economy will have a ‘hard landing’.
Some people believe there will be a hard landing in the US, while others hope for a soft landing or even no landing at all. Economist David Rosenberg recently examined the prospects for the Federal Reserve Bank of Philadelphia’s manufacturing business since 1968 and concluded that the US seems headed for a “hard landing.”
Many people believe that the Federal Reserve will cut interest rates very soon, including Gundlach. However, Fed Chairman Jerome Powell said rate cuts are not in the Fed’s base case, stressing that inflation remains too high. Meanwhile, economist and gold fanatic Peter Schiff has warned that inflation is about to get much worse and the cost of living for Americans will rise sharply.
Do you agree with billionaire Barry Sternlicht? Let us know in the comments section.
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