Cathie Wood took to social media to ease investors’ fears that the Federal Reserve will raise interest rates. Her comments come in the wake of a stronger-than-expected US jobs report.
Cathie Wood shares an overview of the jobs report
The latest labor market data is being misinterpreted as a sign of inflation for investors, according to the founder of ARK Invest. She said that bond markets give a clearer picture of the economy.
In X, Wood pointed out that Nonfarm payrolls have been added 172,000 jobs compared to the consensus forecast of 88,000. Previous months were also revised by an additional 93,000 jobs. On the other hand, wages increased by about 0.3%.
“However the market has sold off,” Cathie Wood books. She noted that investors are betting on “stronger than expected employment and growth that will lead to an acceleration in inflation.”
The narrative goes: The dollar is in a death spiral, inflation is back, and the jobs boom is a trap. We see something opposite. Hear what we think is really going on in this month’s episode of “In The Know.” @Cathy Dodd.https://t.co/36f5gsZeU3
— ARK Invest (@ARKInvest) June 5, 2026
However, Wood argues that the opposite situation may occur in light of productivity trends. She wrote that productivity growth of about 3% and unit labor costs of about 0.5% indicate “healthy productivity-led growth” rather than an overheating economy.
Wood also pointed to the Treasury market. She noted that interest rates on Treasury bonds are more stable, despite the significant rise in oil prices last year. She added that the steeper yield curve during previous cycles of similar energy shocks was followed by faster increases in inflation expectations.
Instead, she believes markets are starting to realize that rapid technological development (particularly artificial intelligence) can have deflationary consequences. She said that the adoption of artificial intelligence has already begun to enhance productivity in many sectors of the economy. Moreover, Cathie Wood believes it could help reduce inflation over time, Wood said.
She also said inflation could “move into negative territory before the end of the year” if geopolitical tensions with Iran ease and oil prices fall. Concerns about the federal funds rate come next BNP Paribas recently revealed Expectations of three increases starting in December 2025.
Will the Fed raise interest rates?
Wood also attacked the Fed’s “historic policy error.” Strongly raise interest rates In 2022. At that time, she said much of the inflation was caused by supply-side disruptions.
“We don’t think the next generation of monetary policymakers will be eager to repeat this mistake,” Cathie Wood declared.
She even highlighted that Trump-backed Kevin Warsh taking on the role of Fed chairman could be bullish. “It is worth noting that gold peaked on the day Kevin Warsh was appointed. The inflation trade may already be behind us,” Wood said.
“If our research is correct, the next phase of this cycle could be characterized by accelerating growth, lower inflation, lower interest rates, and a strengthening US dollar,” she concluded.
