Last Updated on March 26, 2023 by Bitfinsider
Barry Sternlicht, a billionaire and the chairman and CEO of Starwood Capital Group, spoke on Thursday regarding the state of the American economy.
Sternlicht reaffirmed that the Federal Reserve should have stopped raising interest rates, noting the banking crisis, after the Fed raised rates by 25 basis points on Wednesday. Numerous significant institutions, including Silicon Valley Bank and Signature Bank, failed recently.
“I think you have to lower rates. That’s how you recapitalize the banks. I think they’ve done enough,” Sternlicht said, adding: “The bond market is telling you what’s going to happen. The bond market is right. Interest rates have to fall. The economy is going to implode.”
The “bond king,” billionaire Jeffrey Gundlach, also discussed last week how the bond market is indicating that the Federal Reserve will shortly significantly lower interest rates.
The CEO of Starwood Capital emphasized: “You do not have to see the car hit the wall to know it’s going 8,000 miles an hour and it will hit the wall,” claiming that Federal Reserve Chairman Jerome Powell “is using a steamroller to get the price of milk down two cents, to kill a small fly.” The economy will experience a “hard landing,” he warned.
Some people predict a hard impact in the United States, while others predict a soft landing or even no landing. The United States appears to be bound for a “crash landing,” according to economist David Rosenberg, who recently analyzed the Federal Reserve Bank of Philadelphia’s manufacturing business outlook since 1968.
Gundlach is one of many people who think that the Federal Reserve will cut interest rates very shortly. The Fed’s basic case, according to Fed Chair Jerome Powell, does not include rate cuts because inflation is still too high. Peter Schiff, a gold enthusiast and economist, has cautioned that the cost of living in America will significantly increase as a result of the impending worsening of inflation.
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