Billionaire hedge fund manager Bill Ackman is skeptical of the Federal Reserve’s ability to reduce inflation, which has seen structurally higher prices persist. “Long-term interest rates are significantly below that, and we think that, of course, is a risk for equities,” Ackman said in a quarterly investor call for Pershing Square Holdings on Thursday. “Part of our argument here is that we think inflation will be structurally higher in the future than it has been in the past.” To curb skyrocketing prices, the central bank approved a 0.75 percentage point increase for the fourth time in a row, bringing the benchmark rate to 3.75%-4%, a 14-year high. The consumer price index has shown some signs of abating, with the index rising less than expected in October. October CPI increased by 0.4%, up 7.7% over the same period last year. Even in a recession, inflation remains well above the Fed’s 2% target, and some areas of the report suggest the cost of living remains high. “We do not believe it is likely that the Federal Reserve will be able to bring inflation back to a steady 2% level,” Ackman said. “Ultimately we will have to accept higher inflation.” The investor said he believes a wave of factors ranging from geopolitical risks, wage hikes to supply chain disruptions has prompted executives across the board to rethink hiring. out of production. “We strongly believe in the argument that many of those businesses will be closer to home,” Ackman said. And it will cost more to do business here.” “We think there are a number of structural reasons why inflation will be more persistent than expected.” Ackman revealed that his portfolio is still hedged against interest rates and currencies. Hedge fund manager Pershing Square has previously urged the Fed to rein in soaring prices by aggressively raising interest rates. In March 2020 as the Covid pandemic raged, Ackman issued a dire warning on CNBC about the health crisis, saying “hell is coming” and begging the White House to shut down the country for a while. month. He then made a $2 billion bet on the market. At the end of the third quarter, the top stocks of the Pershing Square hedge fund included Lowe’s, Chipotle, Restaurant Brands, Hilton and Canadian Pacific Railway.