NEW YORK: Billionaire investor Bill Ackman is betting the Federal Reserve (Fed) will begin cutting interest rates sooner than markets are predicting.The Pershing Square Capital Management founder said such a move could happen as soon as the first quarter.

Traders are fully pricing in a rate cut in June, with the chance of a cut happening in May priced at about 80%, according to swaps market data.

The Fed began aggressively raising rates in March 2022, leading to the fastest pace of rate increases in 40 years. The central bank has yet to cut rates even as US inflation has broadly slowed this year.

“What’s happening is the real rate of interest, which is what impacts the economy, keeps increasing as inflation declines,” Ackman said in an upcoming episode of The David Rubenstein Show: Peer-to-Peer Conversations.

 - Bloomberg