Hedge fund titan Bill Ackman predicted the Federal Reserve will begin slashing interest rates as early as the first quarter to avert “a real risk of a hard landing” for the US economy.
Fed officials have unanimously decided to keep the benchmark federal funds rate at its current 22-year high, between 5.25% and 5.5%, for the past two policy meetings with little indication that they’ll slash interest rates following the next two-day meeting on Dec. 12 and Dec. 13.
Ackman told Bloomberg that if the Fed keeps rates around the 5.5% range while inflation trends below 3%, thats a very high real rate of interest.
Inflation, meanwhile, has been decelerating. October’s Consumer Price Index which tracks changes in the costs of everyday goods and services — rose 3.2%, a slowdown from September’s 3.7% advance, but a figure Fed Chair Jerome Powell has repeatedly reiterated is still above the Fed’s 2% goal.
Whats happening is the real rate of interest, which is what impacts the economy, keeps increasing as inflation declines, Ackman told Bloomberg.
I think theres a real risk of a hard landing if the Fed doesnt start cutting rates pretty soon, Ackman added, noting that hes seen evidence of a weakening economy.
Traders however, aren’t fully pricing in a rate cut until the end of 2024’s second quarter, in June, Bloomberg reported, citing swaps market data.
The chance of a cut happening in May is some 80%, the data showed.
Though Ackman didn’t elaborate on the “evidence” he sees that the US economy could be headed towards its first recession since 2007, last month’s surge in long-term Treasury yields stoked fears of a hard landing.
At the time, bond yields briefly surpassed 5%, making it more expensive for consumers and companies to borrow money, thereby undercutting the economy and increasing the risk of a recession.
Ackman, whose made his name building up Pershing Square Capital Management’s $17 billion portfolio, insisted to Bloomberg that he’s not convinced the US economy is headed for a “soft landing,” in which the Fed would be able to continue its tightening regime while staving off a recession.
He acted on this belief back in August, when he shorted 30-year Treasury bonds — a move that netted Ackman’s fund a profit of about $200 million.
Representatives for Ackman at Pershing Square did not immediately respond to The Post’s request for comment.
Economists have also largely predicted that an interest rate cut is forthcoming, especially given a weaker-than-expected jobs report in October, when the Bureau of Labor Statistics reported that the US economy added 150,000 jobs.
The unemployment rate is now 3.9%, the agency said, above the Fed’s 3.8% year-end forecast.
Inflation has also trended weaker than central bankers’ estimates as Americans see some reprieve from the Fed’s aggressive tightening cycle, which began in March 2022.
Rates have since increased at a pace not seen in 40 years, and the Fed hasn’t cut interest rates in over a year despite falling inflation.
Writing 26 books and a memoir in his lifetime, John le Carré is widely considered to be one of the best spy novelists of all time.
His son, Simon Cornwell, told Sky News: “I think there was only one thing that was more important to him than his family and that was his writing.”
Image: Rory Keenand and Mat Betteridge in The Spy Who Came In From The Cold. Pic: Johan Persson
Image: Tom Hiddleston returns in season two of The Night Manager. Pic: BBC/Ink Factory/Des Willie
First gaining attention in 1963 with his breakout novel, The Spy Who Came In From The Cold, cementing his reputation 10 years later with Tinker Tailor Soldier Spy, his work is now enjoying a resurgence.
The Spy Who Came In From The Cold has been adapted for the stage for the first time, with confirmation of a TV series to follow, while another of his works, The Night Manager, premieres its second season starring Tom Hiddleston in the new year.
There are further productions waiting in the wings, plus an unfinished le Carré play with the potential to be developed.
And archives of le Carré’s work – containing over 1,200 boxes of material – have gone on display at the Bodleian Libraries at the University of Oxford.
Writing under a pen name, le Carré, who was born David Cornwell, died in December 2020.
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His elder sons, Simon and Stephen, now manage the film, TV and stage rights of his work through their studio The Ink Factory, while his youngest son, Nick, expands the George Smiley universe.
Image: (R-L) Nick Harkaway, John Le Carré, and Simon, Stephen and Tim Cornwell. Pic: Clare Cornwell
Smiley’s continuation ‘could have gone horribly wrong’
One of le Carré’s most well-known creations, Smiley was the antidote to James Bond – bespectacled, balding and a little out of shape – and a recurring character in le Carré’s books.
Simon says Nick, who has two more Smiley books in the pipeline, was “taking on a big risk” developing the character, but insists, “he is the only person who could have done it and done it that well”.
He goes on: “He could find my father’s voice… he grew up talking every day to my dad, as we did, and he just knows at an instinctive level what’s important…
“There are so many ways in which it could have gone horribly wrong, and it went brilliantly right.”
Image: Nick Harkaway with his first Smiley continuation novel, Karla’s Choice. Pic: AP
‘A family enterprise’
Explaining how they all work together – calling it a “family enterprise in the best of ways” – Simon explains: “A lot of authors, when they die, they leave very strict instructions to their children, their estate as to how things should be managed and lots of rules and restrictions and everything else. My dad didn’t do that.”
Le Carré’s fourth son, Tim, sadly died aged 59 in 2022, shortly after editing a collection of his father’s letters, titled A Private Spy.
Le Carré is by no means the only author whose legacy lives on via others.
Announcing a staggered retirement, Lee Child passed his hit creation Jack Reacher on to his younger brother Andrew in 2020.
PG Wodehouse’s much-loved Jeeves and Wooster stories have been rewritten this Christmas by celebrity fans including Frank Skinner and Alan Titchmarsh, half a century after his death.
Image: Daniel Craig at the No Time To Die world premiere in 2021. Pic: Reuters
Staying part of the conversation is key
While Ian Fleming’s James Bond has been continued by 15 authors so far, and spilling into the young adult genre, capturing a whole new generation of readers.
Mark Edlitz, intellectual expert and author of The Many Lives Of James Bond, told Sky News such continuations are essential to the survival of the work.
Image: Author Mark Edlitz has written about the Bond continuation novels
“We have seen all these detectives and spies who don’t have a movie series or a TV series to bolster their eyeballs, and then they fade from public view.
“These books and movies help keep the author’s work present and viable and part of the public conversation.”
Sarah Baxter, senior contracts advisor for The Society of Authors, says remaining relevant and visible has another big benefit too.
“That kind of partnership can go on to give a whole new lease of life to works that may have been written many, many years ago, and it can go on to generate a lot of income for a literary estate.”
Image: Le Carré – an enigma, even to his family, to the end. Pic: AP
‘An enigma’
More than 60 million copies of Le Carré’s books have been sold worldwide, with new adaptations likely to boost those sales further.
But Simon Cornwell says the investment in his father’s work is about more than just profits.
“We became very, very close as a family because he was very keen to be a proper dad and we were working with him and his material as well, so it was particularly towards the end of his life. It was a beautiful, thrilling thing.”
A master storyteller, the moral ambiguity of the fictional world he constructed reflected back on to its creator.
Simon says: “He remained an enigma. I think in some ways he was probably an enigma to himself…
“He was an extraordinary man to be close with, but do you ever understand somebody like that? Probably not.”
His work more widespread than ever, but the man himself – still a mystery.
The Spy Who Came In From The Cold is at @sohoplace in London’s West End to 21 February before embarking on a UK Tour.
John le Carré: Tradecraft is at the Bodleian Libraries at the University of Oxford until 6 April.
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