Bill Ackman Just Said 4 Words Blasting the Fed's Latest Rate Hike: "Just Made a Mistake." Here's Why He Thinks Higher Rates Could Backfire on AI-Driven Inflation.

On Sept. 16, the Federal Reserve lifted the federal funds rate by 25 basis points to a range of 3.75%–4.00%, its first hike since July 2023. The decision was unanimous, 12–0, as policymakers aimed to cool inflation that has been above the Fed’s 2% target for five years. Billionaire investor Bill Ackman, CEO of Pershing Square Management, argues the move could worsen inflation. In a social media post, he suggested that higher rates may not curb demand in the AI era if spending on AI data centers is relatively inelastic. The article also notes that corporate debt financing often depends more on longer-term bond yields than the short-term fed funds rate, complicating the usual inflation-throttling mechanism.