Bill Ackerman (Bill Ackman), founder of hedge fund firm Pershing Square (Pershing Square, INC.), posted an article that "strongly supports" the Fed's aggressive process of raising interest rates.He said the move would effectively reduce the risk of long-term high interest rates.Hours before the series of tweets, he warned of a lack of investor confidence that the Fed would rein in high US inflation and called on the Fed to take more aggressive action.

It is reported that since the end of October last year, Ackerman has been calling on the Federal Reserve to speed up the pace of tightening monetary policy. From calling for an immediate reduction in QE and raising interest rates as soon as possible, to raising interest rates by 50 basis points, Ackerman has been urging the Fed to "collect water."

Some analysts speculate that as a hedge fund manager, he generally prefers low market interest rates, and Ackerman's support for the Fed's aggressive rate hike may suggest that his investment strategy will shift to a defensive strategy, after all, his hedge fund Pershing Plaza's massive construction of NFLX.US in the first quarter resulted in huge losses. Ackerman revealed that the company had sold its stake in Netflix Inc, and some institutions estimated that he would lose about $435 million on the investment.

Zhitong Financial APP learned that Ackerman wrote on Twitter today: "Now, by raising interest rates sharply, the Fed can protect and enhance the overall strength of the stock market and the economic strength of everyone, while curbing livelihood-destroying high inflation, especially those affected by high inflation.。”

The following is the full content of Bill Ackerman's tweet:

I disagree with some people who think that higher short-term interest rates are bad for the stock market. The value of a long-term financial asset is the present value of the future cash flow it generates during its life cycle. The greater the back-end cash flow of an asset, the more sensitive it will be to the long-term interest rates used to discount those cash flows. When the Fed raises short-term interest rates, it reduces the value of short-term assets, such as short-term fixed-income securities.But if the role of increasing federal funds is to curb inflation and thus long-term interest rates, it may increase the value of long-term assets such as stocks.In that case, why does the stock market often fall when the Fed raises interest rates? "

"that's because the Fed usually deals with inflation pre-emptively. Until the inflation problem is resolved to the satisfaction of the market, investors do not know whether and how long it will take the Fed to quell inflation. "

"uncertainty is the natural enemy of the market, especially in the short term. That's why I thinkThe sooner and more aggressively the Fed raises interest rates to curb inflation, the lower the risk that long-term interest rates will remain high and the more likely they will remain low. "

In the memory of many investors, the stock market has benefited from long-term low interest rates, and if this model is changed as a result of the Fed's policy mistakes, then stocks and other long-term assets will be hurt. The stock value affects the capital cost of the enterprise and plays a vital role in the enterprise confidence. By raising interest rates sharply now, the Fed can protect and strengthen the overall strength of the stock market and the economic strength of everyone, while curbing livelihood-destroying inflation, especially those affected by high inflation. "