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  • Writer's pictureBy The Financial District

Carl Icahn Predicts Recession, Bets vs U.S. Malls, Real Estate

Billionaire investor Carl Icahn anticipates a US recession or "even worse" ahead. Icahn told CNBC he isn't sure the Fed can engineer a "soft landing" in tackling high inflation, Shalini Nagarajan reported for Business Insider. To protect against a possible recession, Icahn is betting against malls and commercial real estate.

Photo Insert: An illustration of Carl Icahn

A recession refers to a period of a significant economic downturn across an economy that lasts for more than a few quarters. This can be seen in a slump in the gross domestic product. "I have kept everything hedged for the last few years," he added.

"We have a strong hedge on against the long positions, and we try to be activist to get that edge ... I am negative as you can hear. Short term, I don't even predict."

The activist investor, whose net worth is estimated at $22.7 billion, is known for purchasing significant stakes in a company, to either completely overhaul the board or set a new path aimed at delivering more shareholder profit. In the face of a potential downturn, Icahn has a very large position against malls and commercial real estate.

"You can't ignore the fact — and I don't know if this is a change that will continue — but you don't have people going to offices all the time anymore, obviously," he said. Soaring inflation was already a key threat to the US economy, but Russia's war has only exacerbated the outlook, he said.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

The Federal Reserve last week took its biggest step yet toward cooling inflation by raising its benchmark interest rate by 0.25 percentage points, ending a two-year period of near-zero rates.

Fed Chair Jerome Powell this week signaled even more aggressive rate hikes will come if needed, comments that sparked a sell-off in the bond and equity markets.

Market & economy: Market economist in suit and tie reading reports and analysing charts in the office located in the financial district.

"I really don't know if they can engineer a soft landing," Icahn said about the Fed. "I think there is going to be a rough landing."

The activist investor pointed to continuing supply-chain problems as a driving factor in persistent inflation.

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