Pershing Square Capital Management founder and CEO Bill Ackman (Trades, Portfolio) said Monday he does not believe the spread of the delta variant of the Covid-19 virus will pose a significant threat to the reopening of the economy.
In an interview with CNBC’s “Squawk Box,” the New York-based hedge fund manager said people are tired of being cooped up after months of lockdowns and want to go out to restaurants and other places despite there still being flare-ups of the virus in unvaccinated pockets of the country. He also noted the variant is less deadly than other strains, so the U.S. could achieve herd immunity faster as more people begin to recover.
“I hope what it does is that it motivates anyone who doesn’t get the vaccine to get the vaccine. I don’t think it’s going to change behavior to a great extent,” Ackman said. “You are going to see a massive, in my view, economic boom ... We are going to have an extremely strong economy coming in the fall.”
As a result of the strong comeback from the pandemic-induced recession, the billionaire investor also expects interest rates to rise and bond yields to trend much higher.
“I think rates are going up. Short rates I think are going to go up a lot faster than people think,” he said. “Coming to the turn of the year ... I think we are going to have meaningfully higher yields as people realize the economy is going to make a big recovery.”
In recent months, the activist investor has been betting big on the recoveries in the restaurant, retail and hotel industries. As of the end of the first quarter, GuruFocus noted his top holdings included home improvement retailer Lowe’s Companies Inc. (LOW, Financial), hotel operator Hilton Worldwide Holdings Inc. (HLT, Financial) and restaurant companies Restaurant Brands International Inc. (QSR, Financial) and Chipolte Mexican Grill Inc. (CMG, Financial).
On Monday, Ackman announced that his blank-check company, Pershing Square Tontine Holdings Ltd. (PSTH, Financial), dropped its deal to buy 10% of Universal Music Group after receiving pushback from regulators. His hedge fund will now take the stake instead.
Watch the full segment below.
