Paul Tudor Jones says inflation could be worse than feared, biggest threat to markets and society

Billionaire hedge fund manager Paul Tudor Jones believes that inflation is here to stay, posing a major threat to the U.S. markets and economy.

“I think to me the number one issue facing Main Street investors is inflation, and it’s pretty clear to me that inflation is not transitory,” Jones said on CNBC’s “Squawk Box” Wednesday. “It’s probably the single biggest threat to certainly financial markets and I think to society just in general.”

“Inflation can be much worse than what we fear. We have the demand side of the equation … and that is $3.5 trillion greater than what it normally would have … just sitting in liquid deposits,” Jone said. :They can go into stocks, or crypto or real state, or be consumed, so that’s a huge amount of dry powder just sitting waiting to be utilized at some point, which is why inflation is not going away.”

The longtime trader said price pressures will continue to rise in the coming months. Inflation ran at a fresh 30-year high in August amid supply chain disruptions and extraordinarily strong demand.

“It’s absolutely dead for a 60/40 portfolio, for a long stock, long bond portfolio. So the real question is how you defend yourselves against it,” Jones said.

Jones is the founder and chief investment officer of Tudor Investment Corporation. He shot to fame after he predicted and profited from the 1987 stock-market crash. He is also the chairman of non-profit JUST Capital, which ranks public U.S. companies based on social and environmental metrics.

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