Billionaire Barry Sternlicht, chairman and CEO of Starwood Capital Group, has warned that the U.S. economy is going to implode, emphasizing that interest rates have to fall. He further stressed that the economy “will have a hard landing.”

Barry Sternlicht on Hard Landing, Economic Implosion

The chairman and CEO of Starwood Capital Group, billionaire Barry Sternlicht, discussed the state of the U.S. economy in an interview with CNBC on Thursday.

Following the Federal Reserve hiking interest rates by 25 basis points (bps) on Wednesday, Sternlicht reiterated that the Fed should have stopped raising interest rates, citing the banking crisis. Recently, several major banks failed, including Silicon Valley Bank and Signature Bank.

“I think you have to lower rates. That’s how you recapitalize the banks. I think they’ve done enough,” Sternlicht opined, adding:

The bond market is telling you what’s going to happen. The bond market is right. Interest rates have to fall. The economy is going to implode.

Last week, billionaire Jeffrey Gundlach, aka the “bond king,” also explained how the bond market is signaling that the Federal Reserve will be cutting interest rates substantially soon.

Asserting that Federal Reserve Chairman Jerome Powell “is using a steamroller to get the price of milk down two cents, to kill a small fly,” the Starwood Capital CEO stressed: “You do not have to see the car hit the wall to know it’s going 8,000 miles an hour and it will hit the wall.” He cautioned:

The economy will have a ‘hard landing.’

Some people believe that there will be a hard landing in the U.S. while some expect a soft landing or even no landing. Recently, economist David Rosenberg examined the Federal Reserve Bank of Philadelphia’s manufacturing business outlook since 1968 and concluded that the U.S. seems to be headed towards a “crash landing.”

Many people believe that the Federal Reserve will cut interest rates very soon, including Gundlach. However, Fed Chair Jerome Powell said that rate cuts are not in the Fed’s base case, emphasizing that inflation is still too high. Meanwhile, economist and gold bug Peter Schiff has warned that inflation is about to get a lot worse and Americans’ cost of living will go way up.

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