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Quant investor Cliff Asness told Bloomberg on Thursday that U.S. equities are vulnerable to a macro shock if inflation doesn’t produce a spirited decline as the market currently expects.
The billionaire investor and co-founder of AQR Capital Management LLC, speaking to Bloomberg Television, said that despite 2022’s declines, U.S. stocks remain expensive versus history, based on a wide assumption that price growth is set to slow.
He stated that “the fat tail event probably is macroeconomic” and that there is “a risk that the macroeconomy delivers results that markets are still woefully unprepared for.”
Asness’ comments follow economic data that has caused some turbulence in markets this week, with some investors increasing expectations for Federal Reserve interest-rate hikes.
The investor also told Bloomberg he expects the revival of value shares to continue.
