Ark Invest CEO Cathie Wood estimates that the U.S. could face deflation within six months.

(AFP file photo)

[Financial Channel/Comprehensive Report] The U.S. economy may face deflation in the next 6 months, and the United The Federal Reserve may soon be forced to abandon aggressive policies.

Inflation is expected to be unexpectedly low, Wood said in an interview with CNBC, and he wouldn't be surprised if there were consecutive months of deflation over the next six months.

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The Fed has been battling inflation, trying to bring it down from a 40-year high of 9.1% in the consumer price index (CPI) in June, easing slightly to 8.3% in August, but Fed officials said they would be watching closely and continuing to rise. interest rates until data showed a sharp decline.

Wood, on the other hand, thinks there may be no need to remain hawkish, as demand in the economy has begun to slow.

It pointed to a slowing energy market and high prices forcing gasoline demand to a 25-year low.

Fed officials remain hawkish on the CPI and unemployment data, but experts point out that these indicators lag actual inflation in the economy.

At the same time, most of the indicators that led to the high inflation data are retreating across the board, including retail sales and commodity prices.

Some warn that excessive rate hikes could tip the economy into recession, while Wood believes the U.S. is already in recession.

Wood said inflation peaked in February, when personal consumption expenditures were at 5.3%, and that inflation is expected to be much lower than expected in the next few years, and Fed policy could turn.

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