Why Cathie Wood Says Fed Won't Hike Rates As Much As Markets Are Betting

The founder and CEO of ARK Investment Management Cathie Wood says that there could be a surprise in terms of Federal Reserves’ interest rates not going up as much as the market has priced in.

Speaking at the Seedly Personal Finance Festival in Singapore, Wood said, “We do believe that the Fed is getting lots of messages right now that it should not tighten too much.”

Wood expects inflation to end its spike and then decline in “dramatic” fashion. The company has struggled amid fear of inflation, she added. 

Also Read: Cathie Wood Cuts Twitter Stake By $5.3M Amid Takeover Bids From Elon Musk, Others

Wood’s ARK innovation exchange-traded fund has had a tough year so far, the firm’s ARK Innovation ETF ARKK is down 45% so far in 2022 and 21% in the past month. 

The Nasdaq 100 is down 19% in 2022, and the S&P 500 is off 10% for the year. 

However, investors seem to be positive with the firm’s performance and have put more than $658 million into the fund this year as of Thursday, including about $59 million last week, according to FactSet data. 

Inflation in the U.S. is at the highest level in the last four decades. The S&P flash U.S. services index fell in April from 58.0 to 54.7, which is a three-month low.