ARK Invest CEO Cathie Wood is not convinced that inflation pressures are as high as the market expects. Her comments come on the heels of heightened investor interest pricing in the possibility of another Fed rate hike. Wood also said there is a possibility that Fed Chairman Kevin Warsh could shift monetary policy more appropriately in the future when inflation begins to ease.
Cathie Wood explains the dynamics of inflation
Wood said investors’ concerns about inflation were the main topic of conversation at recent meetings abroad. “On a roadshow through Asia and Europe, I was struck by investors’ fears of inflation,” she wrote. The ARK Invest CEO added that many investors were surprised by her view that “inflation could collapse significantly, and not just because of oil prices.”
Its words follow the mutation of the title Inflation in the consumer price index to 4.2% in May as traders adjust to the Fed’s new stance. The move upended the market’s hopes Interest rates increase in September To 25 basis points higher, as Warsh stressed the central bank’s determination to reach the 2% inflation target.
However, Cathie Wood said there is no need to worry about core inflation as it is on the verge of extinction.
“As measured by unit labor costs, inflation has already fallen to 0.5% year-on-year,” she said. U.S. productivity rose about 3% from a year earlier, and hourly compensation rose 3.5% during the first quarter, according to Wood, who cited a series of economic data. She added: “So, the core inflation rate was 0.5%. There is no inflation due to increased costs!”
In conclusion, if the US economy continues to gain momentum – even boom times – while inflation falls to 0-1% or lower over the next few years, as we think is likely, a Kevin Warsh Fed will not stand in the way. The Fed is shifting from fighting growth to encouraging it.
– Cathie Wood (@CathieDWood) June 24, 2026
The ARK Invest founder also pointed to other inflation metrics that contradict the government’s data. “The inflation rate, a measure that measures the prices of thousands of consumer goods and services in real time 24/7, fell from 11% year-on-year in 2022 to 1.8%, while the core inflation rate fell to 1.4%,” she said.
What will Kevin Warsh’s Fed decide next?
Cathie Wood also noted that Warsh knows the difference between official inflation statistics and what is happening in the economy directly. “I believe Kevin Warsh understands not only the deflationary role that productivity plays, but also the flaws in the inflation rates that the government measures,” she declared.
in the future, Cathie Wood predicts The Fed will focus on economic growth if inflation declines. “If the US economy continues to gain momentum – even boom times – while inflation falls to 0% to 1% or less, a Warsh-era Fed will not stand in the way,” she wrote.
she That’s it “The Fed is shifting from fighting growth to encouraging it,” he said.
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