Billionaire hedge fund supervisor Paul Tudor Jones stated the environment for financiers is even worse than ever as the Federal Reserve is raising rate of interest when monetary conditions have actually currently ended up being progressively tight.
“You can’t think of a worse environment than where we are right now for financial assets,” Jones stated Tuesday on CNBC’s “Squawk Box.” “Clearly you don’t want to own bonds and stocks.”
The Fed is anticipated to reveal a half-percentage point boost in its benchmark rate of interest on Wednesday, to tamp down rising inflation at a 40- year high.
The creator and primary financial investment officer of Tudor Investment thinks financiers are now in “uncharted territory” as the reserve bank had actually just alleviated financial policy throughout previous financial downturns and monetary crises. He stated financiers need to focus on capital conservation in such a difficult environment for “virtually anything.”
“IÂ think we’re in one of those very difficult periods where simple capital preservation is I think the most important thing we can strive for,” Jones stated. “I don’t know if it’s going to be one of those periods where you’re actually trying to make money.”
Many on Wall Street have actually grown more worried that the Fed might tip the economy, still in the middle of a pandemic, into economic downturn with aggressive tightening up to manage skyrocketing costs.
“They’ve got inflation on the one hand, slowing growth on the other, and they’re going to be clashing all the time,” Jones stated.
With severe volatility ahead, the long time trader stated he would think about owning trend-following techniques, which typically utilize algorithmic designs to recognize rate patterns in markets.
“If there was a strategy that I would want to employ right now, if someone put a gun to my head, I’d say simple trend-following strategies,” Jones stated. “They are not too popular today. … They will probably do very well in the next five to 10 years.”
Jones shot to popularity after he forecasted and benefited from the 1987 stock exchange crash. He is likewise the chairman of not-for-profit Just Capital, which ranks public U.S. business based upon social and ecological metrics.
