Bill Ackman Blames 'Forced Selling' By Leveraged Traders For Market Chaos: Investors Are 'Reading Too Much Into Short-Term Market Movements'

Billionaire investor Bill Ackman has attributed the recent dramatic volatility across rates, currencies, and equities to “forced selling” by highly leveraged market participants, rather than fundamental economic shifts.

What Happened: In an X post, Ackman argued that investors and market commentators are overinterpreting short-term market movements, mistaking technical liquidations for signals of underlying economic or policy changes.

Ackman believes that the significant leverage prevalent in the market is the primary culprit. He highlighted the stark contrast in permitted leverage – up to 10:1 for equities and a staggering 100:1 for Treasuries and currencies.

This high degree of leverage, he explains, makes traders particularly vulnerable to margin calls and forced unwinding of positions during periods of market stress, leading to amplified and potentially misleading price swings.

“I believe that it is much more likely that recent sharp moves in these asset classes is due to highly leveraged market participants being forced out of positions than due to fundamentals,” Ackman stated.

Ackman also raised concerns about the regulatory environment, questioning the presence of stricter margin rules that are supposed to safeguard market stability. According to him, the current leveraged levels create an environment for destabilizing market movements.

Investors and market commentators are reading too much into short-term market movements in rates, currencies and equities.

I believe that it is much more likely that recent sharp moves in these asset classes is due to highly leveraged market participants being forced out of…
— Bill Ackman (@BillAckman) April 11, 2025

Why It Matters: Ackman lauded President Donald Trump‘s 90-day tariff pause on Wednesday, expressing gratitude and praising Treasury Secretary Scott Bessent. He viewed the move as an ideal window for trade negotiations, particularly with China, urging them to engage quickly

Ackman had previously warned of severe economic consequences if the tariffs were implemented. However, after the tariff pause, he described Trump’s move as “Textbook, Art of the Deal.”

This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.
— Bill Ackman (@BillAckman) April 9, 2025

Price Action: Following Thursday’s declines, the Nasdaq 100, S&P 500, and Dow Jones indexes were significantly below their recent peaks, registering drops of 17.46%, 14.31%, and 12.16%, respectively.

However, the markets seemed to rebound after Thursday’s fall. The SPDR S&P 500 ETF Trust SPY was up 0.45% at $526.96, and the Invesco QQQ Trust ETF QQQ tracking the Nasdaq 100 was higher by 0.51% at $448.46, based on Benzinga Pro data.

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