Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.
Adam Galika | CNBC
Billionaire hedge fund manager Paul Tudor Jones believes the stock market could rise further this year as the Federal Reserve ends rate hikes to combat inflation.
“I think policy is definitely over,” Jones said of the Fed’s rate hike campaign on CNBC’s “Squawkbox.” “They could probably declare victory now because the CPI has fallen for 12 months in a row…that has never happened before in history.”
The central bank has raised rates 10 times since March 2022, raising the federal funds rate to its target range of 5% to 5.25%, the highest since August 2007. The consumer price index has cooled significantly since peaking around 9% in June. 2022. In April the gauge dropped to his 4.9%.
The long-time investor said current market conditions resemble mid-2006 before the Great Financial Crisis, with stocks rising for more than a year after the Fed stopped tightening monetary policy.
“I think the stock price… will continue to rise this year,” Jones said. “I’m not too bullish because I think it’s going to be a slow effort.”
The investor said there will be some indigestion in the short term due to the war over the U.S. debt ceiling, but he will buy political instability dips.
Jones rose to prominence after profiting from predicting the 1987 stock market crash. He is also Chairman of Just Capital, a non-profit organization that ranks publicly traded US companies based on social and environmental indicators.
He believes there is a plethora of ready-to-use dry powders available after a particularly tedious period for deal-making activity.
“We don’t have an IPO, we don’t have a calendar, we don’t have a secondary, we have a valuation of 19, but no one is in such a rush to make an offer. Clearly something is going on inside the stock market,” Jones said. Stated. “From a flow standpoint, it’s constructive.”
