Bill Ackman has had a good summer, with his bet on 30-year Treasury bonds paying off in dramatic fashion over the past few weeks.
In lieu of taking a victory lap, Ackman opted to press his case during an appearance Thursday at CNBC’s Delivering Alpha conference, where he discussed his reasoning behind the bet and his view that yields have further to climb — while insisting the trade hadn’t been as big a slam dunk as it might seem.
The hedge-fund manager, whose Pershing Square Capital Management just had its “best five years in the history of the firm,” said he expects structurally higher inflation and the U.S. government’s need to issue more bonds to fund a yawning budget deficit to keep the pressure on yields. “In relative short term, there are reasons why rates can move a lot,” Ackman said. “We’re going to have a government shutdown, and we’re going to have a data shutdown. We have the worst technical environment in our lifetime in terms of supply of bonds and buyers of bonds.”
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