Druckenmiller sees US falling into recession next year

Reuters
·1 min read

Sept 28 (Reuters) - Billionaire investor Stanley Druckenmiller said he believes the Federal Reserve’s monetary policy tightening may push the U.S. into a bigger-than-expected recession next year.

Speaking at CNBC’s Delivering Alpha Conference in New York, the founder of the Duquesne family office said he “would be stunned” if the U.S. does not have a recession in 2023 as a result of Fed tightening.

“Our central case is a hard landing by the end of ‘23,” Druckenmiller said. "I will not be surprised if is larger than the so-called average 'garden variety'" recession.

The Fed has raised interest rates by 300 basis points this year as it fights the worst inflation in decades and policymakers have signaled more jumbo rate hikes ahead, roiling bonds and sending U.S. stocks into a bear market.

Druckenmiller said he also didn’t rule out that the Fed’s policy tightening could lead to a “really bad” event, though it is not his base case.

“I don't rule out something really bad. Why? Because if you look at the liquidity situation that has driven this we're gonna go from all this QE to QT,” he said. (Reporting by Carolina Mandl; Editing by Ira Iosebashvili and Deepa Babington)

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