Galaxy Digital CEO Mike Novogratz.

Fed Chair Jerome Powell should stress the central bank’s hawkish stance against inflation, Mike Novogratz said.  
The Fed will be “handcuffed” to future inflation reports after August’s hot CPI report, he said. 
He sees long-term investment in stocks and crypto currently dependent on short-term economic data. 

Federal Reserve Chair Jerome Powell should emphasize the central bank’s hawkish stance against inflation at its meeting this week as consumer prices at multi-year highs appear sticky, billionaire investor Mike Novogratz said on CNBC. 

“[Powell] threw us all off track a little bit two meetings ago when he said, ‘I’m going to raise rates and then pause and watch.’ And … he had to backtrack,” Novogratz, the CEO of crypto financial services firm Galaxy Digital, said in an interview on Tuesday. 

“I think [Powell’s] going to go, ‘I’m going to raise rates. I’m going to stay vigilant and I’m going to raise rates until I see inflation start to crack,” Novogratz said. “He’s in a tough position. He’s going to have to stay hawkish. I don’t think the markets will love it.” 

Novogratz expects the Fed on Wednesday to raise the Fed funds rate by 75 basis points, a view largely held by investors. He said he’s currently shorting stocks in his personal account. 

The August consumer price inflation report was “bad,” said Novogratz. He also said inflation looks sticky with elevated labor costs and owners’ equivalent rent and a pending wage increase for railroad workers.  Unionized US railway workers will see their pay rise 24% over a five-year period between 2020 through 2024 if they ratify a tentative deal that was reached last week. 

Consumer price inflation in August cooled by less than anticipated, sinking US stocks last week. The Nasdaq Composite dropped by roughly 5.5% and the

Source:: Business Insider


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