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The Federal Reserve is losing its battle on inflation and could work to “restore its credibility” by surprising markets with a bigger-than-expected increase in its key interest rate, Bill Ackman said.
The Fed could raise rates “with an initial 50 bps surprise move to shock and awe the market, which would demonstrate its resolve on inflation,” Ackman said in a series of tweets.
“While it has become conventional wisdom that the Fed will raise rates three to four times this year to mitigate inflation, the market expects 25 basis points increments,” he added.
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