Ross Gerber Thinks Economy Is Decelerating Rapidly And Fed's Worsening It: 'We Are Sort Of In Uncharted Territory'

Gerber Kawasaki CEO Ross Gerber believes the U.S. economy is decelerating rapidly and the Federal Reserve is making it worse.

"The actual economy is decelerating quite rapidly here in the United States and the Fed's actions have had the intended consequence. There just needs to be a certain patience that they have to let things work themselves out. So, the continuous raising of rates puts the economy and the banking system more at risk than necessary," Gerber told Reuters.

Also Read: Best Penny Stocks

The ace investor also highlighted that in the wake of the ongoing crisis, banks are changing their credit standards. Given the fact that the two beleaguered lenders were major players in California, Gerber points out that the economy of California will get affected.

"In the state of California where First Republic Bank and Silicon Valley Bank were huge players in many specialty markets; not having them actively lending will definitely affect the economy here in California which is one of the biggest economies in the world," he said.

The Federal Reserve on Wednesday announced a hike in the policy rate by 25 basis points on expected lines. Although the central bank signaled it might soon pause future interest rate hikes, Chair Jerome Powell also reasserted his commitment to bring inflation down to 2%.

Gerber believes Fed's actions will have a much more dramatic effect on small businesses than they had in the past.

"We have now created imbalances in our banking system that I don't think the Fed or the Treasury Secretary have any clear path to working out. We are sort of in an uncharted territory thanks to these dramatic actions from the Fed," Gerber said.

Read Next: Cathie Wood Shrugs Off Hindenburg Attack On Jack Dorsey’s Block With $21M Stock Buy — Slashes Enormous Tesla Stake