Michael Burry, the ‘Big Short’, sees the US Recession by 2023, Inflation Spoke

• Michael Burry stated that he expected the US to enter recession in 2023 and that inflation would rise again.
• The investor “Big Short” predicted that inflation would drop overall in 2023 due to economic weakness.
• He said that the Fed and the US government would respond to inflation with stimulatory policies, causing inflation again to rise.

Michael Burry stated that the US economy is in danger of experiencing a recession in 2023 and another spike in inflation.

The investor behind “The Big Short” fame. knownThe gloomy forecast was issued by the grim, but often accurate, forecaster in a tweetPublished Sunday.

“Inflation peaked. He stated that this is not the final peak of the cycle. “We will likely see CPI lower, possibly even negative, in 2H 2023 and the US in recession according to any definition.”

He said, “Fed will reduce and government will stimulate. We will also see another inflation spike. It’s not difficult.”

Inflation reached a 40 year high of 9.1% at June and remained above 7 percent in November. This was well ahead the US Federal Reserve’s target of 2%. The central bank responded by raising its base interest rate from a near-zero level to over 4%, and signaled that it will reach a peak of 5% in 2023.

Higher interest rates aim at reducing upward pressure on prices and encouraging spending, investing and hiring. They can also reduce corporate profits and slow down economic growth, which can lead to a decline in asset prices and eventually, recession.

Burry’s view appears to be that inflation will cool and the economy will weaken in 2023, prompting the Fed to cut rates and the government to boost spending in an effort to spur growth — which, in turn, will drive up demand and prompt inflation to rise again.

The Scion Asset Management chief warnedIn April 2020, he stated that higher inflation could be possible if the economy is reopened after the pandemic. He also flaggedLast year, American households were putting aside less money each month and racking-up debt. virtually exhaust their savings by December — raising the prospect of a slump in consumer spending and a prolonged recession.

Burry is best-known for his work with the AIDS Foundation. billion-dollar wagerAgainst the housing bubble of the mid-2000s, which was immortalized by the movie and book “The Big Short.” He also bet againstLast year, Elon Musk’s Tesla and Cathie Wood launched Ark Innovation Fund. inadvertently laid the groundworkYou can get in on the meme-stock craze with GameStop investments before the stock skyrocketed at 2021’s start.

The Scion chief was also last summer sounded the alarmOn the “greatest speculation bubble of all times in all things” warningBuyers of meme stocks and cryptos were accelerating towards the “mother crash.”

Here’s a screenshot showing Burry’s latest tweet.

Continue reading: A Michael Burry expert breaks down what makes the ‘Big Short’ investor special. He also revisits Burry’s iconic bet against the housing bubble, and his GameStop, Tesla, and Ark wagers.