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Starwood Capital Group CEO Barry Sternlicht appears on an episode of Bloomberg Wealth with David Rubenstein in New York, June 28, 2023. Victor J. Blue—Bloomberg/Getty Images
For more than two years, Federal Reserve Chairman Jerome Powell has struggled with rising inflation. And despite some success in containing consumer price inflation, which reached a 40-year high of more than 9% in June 2022, the Fed chairman reiterated this in Congress. testimony It is “not guaranteed” that progress will continue this week.
But don’t worry. Barry Sternlicht, the outspoken billionaire co-founder and CEO of real estate giant Starwood Capital, has a solution to Powell’s biggest problem.
“What he really needs to do is walk across the street and tell Congress to stop spending money like a drunken sailor,” Sternlicht said in the new document. interview TV program distributed worldwide More about Graham Bensinger.
While the Fed is trying to curb inflation by raising interest rates, Sternlicht, in his typical, somewhat caustic style, said that Congress and the Biden administration are at least meeting that challenge by dramatically increasing federal spending and the national deficit. He pointed out that this is an issue. compared In the pre-corona era.
“One part of the government, the Federal Reserve and Powell, is pumping the brakes, and the other part of the government, Congress, is spending as much money as they can,” he said.
Mr. Sternlicht began his career as a Wall Street trader and is currently boast The country, which has a net worth of $3.8 billion, has long argued that raising interest rates, the Fed’s main tool to fight inflation, doesn’t work.
Last March, the billionaire CEO said a central bank interest rate hike would be like “using a steamroller to lower the price of milk by two cents” or “killing a little fly.” Just months later, Sternlicht warned that the real estate industry, particularly office real estate, was in the midst of a “Category 5 hurricane” due to Fed policy. He also said this in October 2022. luck Jerome Powell and his “merry bunch of lunatics” are destroying the economy and risking “social unrest.”
But now, with the economy showing resilience despite rising interest rates, Sternlicht appears to have changed his mind. Far from destroying the economy, the Fed’s interest rate hikes aren’t doing enough, he says.
“Rising interest rates are not slowing down the economy. People think so, but they’re not,” Sternlicht told Bensinger. “Because if you look at the job market, it’s health care, government, education.” [that] We are adding tons of jobs and are not affected by interest rates. ”
Sternlicht called raising interest rates a “difficult” and inappropriate way to fight inflation. But instead of warning that the U.S. economy was being destroyed by these rate hikes, he previously said thatapply the brakes suddenly“It’s called a rate hike.”suicide,” and list Mr. Sternlicht now appears to believe that Mr. Powell’s measures are only devastating key sectors of the economy, including the regions in which he operates.
Regarding real estate, Sternlicht argued that we are experiencing a once-in-a-lifetime crisis. “I’ve been through five or six crises. This one feels like the worst,” he said, adding, “Usually it ruins the global economy and the real estate industry, but not this time. was just collateral damage.”