- Paul Tudor Jones told CNBC he’ll “go all in” on the inflation trade if the Fed remains unconcerned soaring consumer prices.
- The billionaire hedge fund manager would buy commodities, cryptocurrencies, and gold.
- Jones said recent economic data has challenged the Fed’s stance that inflation is transitory.
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Billionaire investor Paul Tudor Jones told CNBC on Monday he’ll bet big on rising inflation if the Fed remains unconcerned about recent economic data showing soaring consumer prices.
The Federal Reserve’s policy meeting this week could be the most important one of Jerome Powell’s career, Jones said, because there’s been so much data that has challenged the Fed’s current stance that inflation is transitory.
The last two consumer price index readings put inflation well ahead of the Fed’s 2% target, the hedge fund manager said.
“If they treat these numbers – which were material events, they were very material – if they treat them with nonchalance, I think it’s just a green light to bet heavily on every inflation trade,” the founder of Tudor Investment Corporation said.
“If they say, ‘We’re on path, things are good,’ then I would just go all in on the inflation trades. I’d probably buy commodities, buy crypto, buy gold,” he added.
“The only thing I know for certain, I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities. At this point in time I don’t know what I want to do with the other 80% until I see what the Fed is going to do,” said Jones.
Economists are anticipating that the central bank will hold its policy stance steady at the conclusion of the two-day meeting and reaffirm the pace of asset purchases. If the Fed were to roll back its accommodative stance, the market could wobble, Jones said.
“If they course correct, if they say, ‘We’ve got incoming data, we’ve accomplished our mission or we’re on the way very rapidly to accomplishing our mission on employment,’ then you’re going to get a taper tantrum,” he added. “You’re going to get a sell-off in fixed income. You’re going to get a correction in stocks. That doesn’t necessarily mean it’s over.”