• Billionaire Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that the U.S. economy is going to implode and will have a hard landing.
• Sternlicht opined that the Fed should have stopped raising interest rates following several major banks failing recently.
• Economist David Rosenberg examined Federal Reserve Bank of Philadelphia’s manufacturing business outlook since 1968 and concluded that the U.S. seems to be headed towards a „crash landing.“
Billionaire Barry Sternlicht Warns of Hard Landing
Billionaire Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that the U.S. economy is going to implode, emphasizing that interest rates have to fall and the economy „will have a hard landing.“
Interest Rates Must Fall
Following the Federal Reserve hiking interest rates by 25 basis points (bps) on Wednesday, Sternlicht reiterated that the Fed should have stopped raising interest rates citing banking crisis as several major banks failed including Silicon Valley Bank and Signature Bank. He said: “I think you have to lower rates. That’s how you recapitalize the banks. I think they’ve done enough.“
Bond Market Signaling Implosion
The bond market is signaling what’s going to happen according to Sternlicht who further cautioned: The economy will have a ‚hard landing.‘ His remarks are echoed by billionaire Jeffrey Gundlach who recently explained how the bond market is signaling that the Federal Reserve will be cutting interest rates substantially soon..
Fed Chair Jerome Powell’s Response
Federal Reserve Chairman Jerome Powell said rate cuts are not in their base case yet, emphasizing inflation is still too high for them to consider cutting rate cuts at this moment despite others such as Gundlach urging them otherwise . Economist Peter Schiff has warned that inflation is about to get worse resulting in Americans‘ cost of living going way up .
Overall it appears like despite warnings from billionaires such as Sternlichth and Gundlaech about an economic implosion if interest rates are not lowered, Jerome Powell believes inflation remains too high for any rate cut decisions at this time point while economist Peter Schiff warns of higher costs of living ahead if inflation rises higher than expected