- Billionaire hedge fund manager Paul Tudor said we’re in a worst-case scenario for markets.
- “We’re in uncharted territory,” he told CNBC. “Clearly you don’t want to own bonds or stocks.”
- Instead of trying to make money, Jones said “the most important thing” investors should do now is to preserve capital.
Hedge fund manager Paul Tudor Jones said investors are facing a worst-case scenario as the
Federal Reserve
raises rates in an already-tightening market.
The founder and chief investment officer of Tudor Investments told CNBC the Fed typically cuts rates instead of hikes them when the economy slows or financial markets show strain.
“We’re in uncharted territory,” he said. “Clearly you don’t want to own bonds or stocks.”
Instead of trying to make money in the current environment, Jones said “the most important thing” investors should do now is to preserve capital.
His comments come as the Federal Reserve is expected to further raise rates on Wednesday to tackle 40-year-high inflation. Markets widely expect policymakers to hike rates by 50 basis points after a quarter-point increase in March that marked the first upward move since 2018.
On Tuesday, Jones noted that the Fed is in a precarious position of slowing growth and soaring inflation that hasn’t been seen since the ’70s.
He echoed sentiments of others on Wall Street who worry the Fed is running the risk of sending the economy into a
recession
with its aggressive tightening tactics as prices for goods climb.
“If there was a strategy that I would want to employ right now, if someone put a gun to my head, I’d say simple trend-following strategies,” Jones said, referring to the practice of using algorithmic models to spot price trends.