Billionaire investor Carl Icahn warns the US economy has tough days ahead - and blames the Fed for painful inflation
Carl Icahn warned that worse days lie ahead for the US economy.
The billionaire investor blamed the Fed's easy-money policies for painful inflation.
Icahn said he sees plenty of bargains in markets today, and he expects more deals to emerge.
Carl Icahn has warned the US economy is going downhill, blamed the Federal Reserve for stubborn inflation, and touted the bargains available for bold investors.
"The worst is yet to come," the billionaire investor said about the economic outlook during MarketWatch's "Best New Ideas in Money Festival" on Wednesday.
"Inflation is a terrible thing," the Icahn Enterprises chairman continued. "You can't cure it."
Icahn asserted that years of loose monetary policy flooded the US economy with cheap cash, fueling rampant speculation and driving asset prices to unsustainable heights. Those days are done in his view.
"We printed up too much money, and just thought the party would never end," he said, according to MarketWatch. "And the party's over."
Unsurprisingly, Icahn cheered the Fed's decision on Wednesday to raise its benchmark interest rate by 75 basis points. However, he would have supported a more aggressive hike of 100 basis points, to between 3.25% and 3.5%, he said.
Speaking via a remote feed, the activist investor noted he sees lots of assets trading at enticing prices, and expects them to get even cheaper as markets head lower. He singled out CVR Energy, an oil refiner and fertilizer manufacturer, as offering particularly good value.
Icahn raised the alarm earlier this year on several of the key issues now plaguing financial markets and the economy. He cautioned in January that asset valuations were out of whack, and predicted the Fed's liquidity injections would cause an inflation problem.
Moreover, he warned in February that he expected to see "this whole thing hit the wall in one way or another." He was referring to the Fed overstimulating the economy with its easy-money policies.
Icahn also suggested in March that Russia's invasion of Ukraine would exacerbate persistent supply-chain issues and a shortfall of cheap imports to the US, making it even trickier for the Fed to beat back inflation without choking economic growth and boosting unemployment.
Given his past comments, Icahn won't be surprised that stocks, cryptocurrencies, and other assets have plunged this year, inflation remains close to a 40-year high, and a recession appears increasingly likely.
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