Carlos Fernandes Barry Sternlicht, a very rich person who is the boss of Starwood Capital Group, said that the U.S. economy is going to have some serious problems in the near future. He also pointed out that interest rates have to go way down, which might cause the economic situation to become bad quickly and suddenly.
For a Stronger Economy
Barry Sternlicht, the boss of Starwood Capital Group and a billionaire, had a chat with CNBC on Thursday about America’s economy.
In accordance to the Federal Reserve increasing interest rates by 25 points this Wednesday, he noted that if they should have proceeded carefully since some major banks like Silicon Valley Bank and Signature Bank were facing problems.
Barry Sternlicht said that interest rates should be lower in order to help banks get more money. He also said that the bond market is predicting that the economy will be worse in the future and interest rates are going down soon. Billionaire Jeffrey Gundlach (known as ‘the bond king’) agreed with Sternlicht, saying that the federal reserve will be cutting interest rates soon.
The CEO of Starwood Capital claims that Federal Reserve Chairman Jerome Powell is using too much force to fix a small problem. He went on to warn that the economy will suffer from a hard landing, just like a car travelling at 8,000 miles an hour will hit the wall.
Some people think the U.S. economy might go down, but in a soft way or not at all. Recently, economist David Rosenberg looked closely at the Federal Reserve Bank of Philadelphia’s manufacturing data from 1968 and determined that it’s more likely that the U.S. will experience a “crash landing”.
Many people think that the Federal Reserve will reduce interest rates soon, including Gundlach. However, Jerome Powell from the Fed said that rate cuts are not part of their plan at the moment, since inflation is too high for now. Economist Peter Schiff also warned us that very soon our cost of living could increase a lot.
Do you agree with Barry Sternlicht? Let us know in the comments below!
