Hedge fund billionaire Paul Tudor Jones is warning of a tough financial test ahead of the US Federal Reserve’s upcoming rate-hike meeting on Wednesday.
In a new interview with CNBC, Jones says the US economy is facing its biggest test since the 1970s and likens the challenges the Fed is facing to an ocean-going ship encountering countercurrents in open waters.
“I think this is one of the most challenging periods facing the Federal Reserve Board in its history. I don’t know if we’ve ever navigated anything like this…we haven’t seen anything like this since the 70’s. It really is unknown water.
I like to think of it as a crosshatch ocean. Usually in the ocean you have a swell that moves in one direction, occasionally you will get a situation where [two swells intersect].
Imagine trying to navigate what you are dealing with in a boat [swells coming from different directions]. We have that now.”
The billionaire, who runs investment management firm Tudor Investment Corporation, says the combination of rising inflation and slowing economic growth is a major test for the Fed, which is expected to hike interest rates tomorrow.
Tudor Jones believes the overall environment is treacherous even for the average investor.
“One cannot imagine a worse environment for financial investments than where we are right now. Of course, you don’t want to own bonds and stocks.
I think we’re in one of those very difficult times where simply preserving capital is… the most important thing we can strive for.
I don’t know if it’s going to be one of those phases where you’re actually trying to make money.”
Looking ahead, the investor mentions the generation gap in relation to new technologies such as Web 3.0, saying that the “brightest and brightest minds that are coming out of college today” are on cryptocurrencies are interested.
“It’s hard not to want to be long [on] Crypto because of the intellectual capital, just the sheer volume flowing into this space…
It’s a boundless internet where suddenly you Blockchain as a verification code so anyone on the internet can connect instantly… and that opens up huge possibilities.
Obviously, central banks and central governments aren’t necessarily going to be big fans of it, especially when it comes to using crypto as a medium of exchange.”
Referring to his own share of digital assets, the billionaire says:
“I have my humble attribution to crypto. I still have a trading position going from fully invested to zero.
Right now I’m modestly invested and I think it’s going to have a bright future as we pull through with these rate hikes. A lot depends on what our central bank does… and how serious we are about fighting inflation.”
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Source: Crypto News Deutsch