Cathie Wood warns of deflation ahead of this week’s key price data

Sep. 12, 2022 9:22 AM ETARK Innovation ETF (ARKK), ARKW, ARKG, ARKQTSLA, ARKF, ARKXBy: Jason Capul, SA News Editor159 Comments

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Ahead of key inflation data, Cathie Wood once again reiterated her opinion that deflation represents the bigger long-term threat to the economy. The comments came as Wall Street gears up for the release of consumer price and producer price data due out later this week.

Wood warned against deflation in tweet put out on Monday: “Deflation in the pipeline, heading for the PPI, CPI, PCE Deflator: from post-COVID price peaks, lumber -60%, copper -35%, oil -35%, iron ore -60%, DRAM -46%, corn -17%, Baltic freight rates -79%, gold -17%, and silver -39%.”

ARK’s CEO and CIO is not the only one raising a red flag about deflation. Tesla (TSLA) CEO Elon Musk weighed in as well, stating recently: “A major Fed rate hike risks deflation.”

The next Fed meeting is scheduled for Sept. 21. Wall Street is now pricing in an 88% chance that it will see a 75 basis-point hike versus the 12% chance the central bank will announce a 50 basis-point rate hike.

Cathie Wood’s innovation-focused ETFs along with their year-to-date price action: (NYSEARCA:ARKK) -54.2%, (NYSEARCA:ARKW) -54.6%, (ARKF) -54.9%, (BATS:ARKG) -40.33%, (BATS:ARKQ) -33.2%, and (ARKX) -23.9%.

Wood also put out another tweet last week highlighting the fact that she believes the Fed is miscalculating inflation and is making a mistake.

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