Bill Ackman: Fed won't meet inflation target without deep recession

Bill Ackman, founder and CEO of Pershing Square Capital, said it would take a severe, job-eliminating recession. After that, inflation could return to the 2% level, what is considered to be the Fed's long-term goal.

Ackman explained that even if inflation were to fall to 2%, that level could not be kept for long. According to the CEO, it would be an appropriate decision to set the bar at 3%. This strategy is seen as best suited for a strong economy and job growth over the long term.

Earlier, Ackman expressed doubts about the Fed's success in fighting inflation. He stated that high inflation and increased interest rates would be long-term. Furthermore, each of these factors poses a risk to the markets.

The CEO stated that globalization, with the shift to alternative energy sources, the need to pay workers more, and supply chain problems are all under inflationary pressure. Because of this, the Fed cannot change its target now, but will probably do so in the future.

BlackRock CEO Larry Fink said that investors will probably have to deal with inflation of about 3-4% and rates of 2-3% now. He named these conditions as a period of "malaise" for the economy.