- Brad Gerstner expects CPI figures to tend towards 4%, contrary to popular expectations.
- Higher rates and inflation won’t stop investors from adopting venture-backed companies.
- Gerstner believes that inflation figures in the next eight weeks will be crucial to the markets.
The renowned American investor and hedge fund manager, Brad Gerstner, says that the inflation data expected in the coming weeks will play a significant role in the market’s direction afterward. He expects the figure to tend towards 4%, contrary to the popular expectation from many experts who believe it would drop faster.
Gerstner made the statement in a podcast organized by the crypto YouTube pair Aaron and Austin Arnold on their popular channel, Altcoin Daily. During the podcast, Gerstner explained that most of the expectations in the market are motivated by emotions, leaving the market in extreme uncertainty.
According to Gertner, who also doubles as the founder and CEO of Altimeter Capital, the fear of uncapped inflation is less today than it was in the last months of 2022. He notes that the dominant idea is that there will be higher rates for extended periods and higher inflation too.
Looking at the current market condition, Gerstner proclaimed that having higher rates and inflation does not stop investors from adopting venture-backed companies with significant secular growth. He noted that in the 2000–2005 era, skyrocketing inflation did not stop people from jumping into the internet boom.
Gerstner stated his concern about the uncertainty surrounding inflation and interest rate figures. He explained that the market abhors uncertainty. Hence, if capital allocators don’t know what to expect from the markets, there could be a shutdown. That is a phenomenon that Gerstner believes will be bad for the economy.
Although Gerstner claims he doesn’t expect the markets to shut down, he believes that inflation figures in the next eight weeks will be crucial.
The US will release its next inflation figures on March 14, 2023. Nearly one week afterward, it would be the next Fed’s meeting when authorities decide on the interest rate.
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