Michael Burry warns Federal Reserve may alter course due to supply chain disruptions
Hedge Fund investor said bullwhip effect will force Fed to reduce rate hikes
• Hedge Fund investor said bullwhip effect will force Fed to reduce rate hikes
Michael Burry, the founder and fund manager of Scion Asset Management, on Monday, tweeted that the “Bullwhip Effect” happening in the retail sector may force the US central bank to reverse rate hikes and its Quantitative Tightening (QT) policy.
The bullwhip effect is the demand distortion that travels upstream in the supply chain from retailers to wholesalers and manufacturers, created by high demand and variance of orders which may be larger than sales.
Pointing at the CNN report, Burry tweeted, “Deflationary pulses from this- -> disinflation in CPI later this year --> Fed reverses itself on rates and QT --> Cycles.”
In April, Burry deleted his Twitter account after several investors ignored his repeated warning and dire predictions of a market crash.