ARK Investment Management LLC, where Ms. Mu is the founder and CEO, has recently had its strategies in trouble due to concerns about inflation. The firm's flagship ARK Innovation ETF is down 45% year to date. Wood expects the surge in inflation to end and then decline in a dramat

ARK Investment Management LLC, where Sister Mumu serves as founder and CEO, has recently had its strategies in trouble due to concerns about inflation. The firm's flagship ARK Innovation ETF is down 45% year to date.

Wood expects the surge in inflation to end and then decline in a dramatic fashion. This scenario may give the Fed room to maneuver and may actually raise interest rates less aggressively than currently forecast.

Wood said it may come as a surprise that interest rates may not rise as much as the market expects.

Inflation in the United States is now at its highest level in 40 years, a situation that could help spur the Federal Reserve to start raising interest rates — putting pressure on risk assets like stocks that Wood and ARK favor. On Friday, the market predicted that the Federal Reserve would raise interest rates four times in a row, by 0.5 percentage points each time. Late on Thursday, some even expected the Federal Reserve to raise interest rates by 75 basis points multiple times.

Wood’s fund wasn’t the only asset to fall. The technology-heavy Nasdaq 100 Index fell 18% in 2022, and the S&P 500 Index fell 10%. There is growing discussion about whether the Federal Reserve can guide the U.S. economy to a soft landing, or whether the aggressive pace of raising interest rates will hurt the job market or push the economy into recession.

Wood said, "We do believe that the Fed has now received a lot of information that it should not tighten too much."

Source: Sina Finance

Original title: Sister Mu asserts: The Fed will not raise interest rates as much as the market currently expects.