“I think we should be bearish on stocks and bullish on inflation,” Einhorn said “Halftime Report” on Wednesday. “I think we’re in a policy now, which is probably pretty good for Main Street, but it’s going to be difficult and increasingly difficult for financial assets.”
The star hedge fund manager believes that the Federal Reserve could have more work to be done to combat stubborn price pressures, lifting interest rates higher than consensus expectations.
“I think that both long and short term rates are headed higher and probably higher than what people are expecting,” Einhorn said.
Treasury yields have surged over the past year on the back of a series rate hikes. The benchmark 10-year Treasury yield on Wednesday topped 4% for the first time since November. Shorter-term rates surged even higher, with six-month and one-year yields topping 5% for the first time since 2007.
Einhorn just scored “an exceptionally good year” with a 36.6% return in 2022, thanks in part to his short position in a slew of innovative technology stocks like those touted by growth investor Cathie Wood.
The hedge fund manager said in a recent investor letter that 2022 in many ways was his best year ever and the period was most comparable to 2001, the year after the last tech bubble popped. He also revealed that he is still short some “bubble” names.