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While many on Wall Street have stopped obsessing about a recession, Jeremy Grantham has not. That should shock no one who has followed the career of Grantham Mayo Van Otterloo & Co.’s co-founder.
Doubling down on the gloom in an interview taped for an upcoming episode of Bloomberg Wealth with David Rubenstein, Grantham said the Federal Reserve’s most aggressive tightening in four decades could tip the economy into recession and take the stock market with it.
“In the end, life is simple. Low rates push up asset prices. Higher rates push asset prices down,” he told Rubenstein. “We’re now in an era that will average higher rates than we had for the last 10 years.”
Grantham, 84, is well known for bearish forecasts that have occasionally been issued before big market shocks, such as in 2000 and 2008. He called the post-pandemic surge in equities “in many ways about equal to the 2000 tech bubble” but said its deflation has been delayed by the frenzy surrounding artificial intelligence. His own call is on the line. While prognostications of doom looked well-timed when shares tanked in 2022, they look less prescient amid this year’s rally.
During the wide-ranging interview, the renowned investor also discussed his record of predicting bubbles, what worries him the most about the economy and where he invests his money.
For more insights from the biggest names in investing, watch “Bloomberg Wealth With David Rubenstein.” Grantham’s interview airs on September 5th on Bloomberg Television at 9:00 p.m. in New York. The interview has been condensed and edited for clarity.
Do you think we’re in a major bubble right now in the United States? And do you think