Bill Ackman still sees massive economic boom despite delta variant, says rates will rebound

Billionaire investor Bill Ackman said on Monday that the spread of the delta variant did not pose a significant threat to the economic reopening, with interest rates rising following the big comeback.

“I hope this will motivate anyone who doesn’t get the vaccine to get the vaccine. I don’t think it will change a lot of behavior,” Ackman said in an interview on CNBC’s “Squawk Box”. Monday. “You are going to see, in my opinion, a massive economic boom … We are going to have an extremely strong economy in the fall.”

The delta variant causes flare-ups in unvaccinated pockets across the country and leads to increased hospitalizations as cases increase. The founder and CEO of Pershing Square Capital Management said the delta variant is less lethal than other strains and the United States may gain herd immunity faster as more people recover from infections.

The hedge fund manager believes bond yields will trend much higher in the second half of 2021 as the economy continues to recover from the pandemic-induced recession.

“I think the rates are going up. I think the short rates are going to go up a lot faster than people think,” Ackman said. “Coming to the turn of the year… I think we’re going to have significantly higher returns as people realize the economy is going to make a big recovery.”

Ackman said declining Treasury yields on Monday offered investors a buying opportunity. The benchmark 10-year rate fell 7 basis points to 1.22% to a new five-month low.

“Today’s decision… I would borrow as much as possible over the long term at a fixed rate based on today’s rates,” Ackman said.

In mid-March, at the height of the Covid-19 crisis, Ackman took to CNBC to warn investors that “hell is coming” and to urge the White House to shut the country down for a month in passionate advocacy.

Days after the interview, Ackman revealed his company exited short positions on March 23 as the S&P 500 bottomed out, pocketing more than $ 2 billion in bets against the markets in March.

The hedge fund manager bet big on the rebound in the food service, retail and hospitality sectors. Its main holdings at the end of the first quarter included Lowe’s, Hilton, Restaurant Brands and Chipotle. It recently bought back the shares of Domino’s Pizza following a downturn.