By Sam Boughedda
Founder and chief executive officer of Ark Investment Management Cathie Wood said, in an interview with CNBC Tuesday, that she was wrong on inflation.
Wood had predicted inflation would unravel, but she now admits that was an error.
“We were wrong on one thing, and that was inflation being as sustained as it has been,” Wood, said. “Supply chain -- I can’t believe it’s taken more than two years, and Russia’s invasion of Ukraine, of course, we couldn’t have seen that. So inflation has been a bigger problem. But I think that it has set us up for deflation.”
Wood added that she thinks we are in a recession, reiterating previous comments that inventories are a significant problem. Wood explained that the increase in inventories is something she has never seen in her career, adding that if Walmart (NYSE:WMT) and Target (NYSE:TGT) have problems, she thinks there are a lot more problems.
The Ark CEO continued that the "consumer is railing against price increases."
“Many people think, ‘oh, the heavy spenders will keep this thing going.’ Consumer sentiment in the highest-income groups is lower than in the lowest-income groups, and the latter group is being tormented by food and energy prices, which are really a regressive tax increase.”
Wood isn’t the only person to admit they were wrong on inflation. In May, Treasury Secretary Janet Yellen said she was “wrong about the path inflation would take.”