Paul Tudor Jones: Inflation Risk Is No Longer Transitory

Billionaire investor Paul Tudor Jones joined CNBC’s Squawk Box on Monday to explain some of the implications of the FOMC’s upcoming meeting, which is slated to be the “most important Fed meeting in Jay Powell’s career.”

Jones, who is also the founder of Tudor Investment Company, does not buy into the Fed’s strong conviction that surging inflation will be temporary. “The idea that inflation is transitory, to me… that one just doesn’t work the way I see the world.” He said that the Fed has been focused too much on reaching full employment, even as financial stability and inflation are flashing red-hot signals.

The latest FOMC meeting— after which Powell is slated to discuss to reporters on Wednesday— is expected to be the most critical in the Chairman’s career thus far. The latest CPI print showed that annual inflation skyrocketed to 5% in May, but Jones, like most others, anticipate Powell will likely once again dismiss the accumulating inflationary pressures.

“If they treat these numbers – which were material events, that were very material – with nonchalance, I think that’s a green light on the inflation trade,” he explained on Squawk Box. “I’d probably buy commodities, buy crypto, buy gold.”

If, on the other hand, the FOMC decides to adjust its current course, then markets could be headed for a turbulent time. “If they course correct, if they say, ‘We’ve got incoming data, we’ve accomplished our mission or we’re on the way very rapidly to accomplishing our mission on employment,’ then you’re going to get a taper tantrum,” Jones said. “You’re going to get a sell-off in fixed income. You’re going to get a correction in stocks. That doesn’t necessarily mean it’s over.”

Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.