The Federal Reserve needs to ‘shock and awe’ the market with one big rate hike ‘to restore its credibility,’ says hedge-fund star Bill Ackman

Billionaire hedge-fund manager Bill Ackman said the Federal Reserve needs to deliver old-fashioned “shock and awe” to financial markets by delivering a much larger onetime increase to benchmark interest rates to combat inflation. 

“The @federalreserve could work to restore its credibility with an initial 50 bps surprise move to shock and awe the market, which would demonstrate its resolve on inflation. The Fed is losing the inflation,” wrote Ackman in a series of tweets on Saturday.
 

whether 3 to 4 would therefore be enough. The @federalreserve could work to restore its credibility with an initial 50 bps surprise move to shock and awe the market, which would demonstrate its resolve on inflation. The Fed is losing the inflation battle and is behind where it

— Bill Ackman (@BillAckman) January 15, 2022

Ackman said the U.S. central bank has lost some credibility on Wall Street, which may be hurting its ability to affect inflation expectations, which is seen by some as a significant drag on sentiment.