David Tepper, Andrew Beal And Bill Conway: The Top People In Finance Speak About The Markets by Nathan Vardi, Forbes

Also see a curated list of top hedge fund letters

Billionaire investor David Tepper is something of a rarity these days in the hedge fund industry, which in general has been going through a disastrous period. Tepper, on the hand, has navigated deftly through financial markets that have hammered others. In a recent interview with Forbes, Tepper said financial markets have relaxed because of China’s more stimulatory policy and that the U.S. stock market is poised to go higher.

“As far as equity markets are concerned, it’s a fair value market that in lieu of any bad events like a British exit or a surprising election result—which is a bit less the case now—you are going to get a U.S. equities market that is going to grind higher,” Tepper said.

For Tepper, the key question for financial markets is, at what point will interest rates go up? “I think the Fed is going to be very very patient because they have a view that they can contain inflation, but it’s much harder to create inflation in the world,” Tepper said. “So that is driving my view that they will take their time. They have said it a million times but the market maybe only now seems to be recognizing that is the case—that they are going to let some degree of inflation come back before they try to kill it.”

Tepper added that the Fed’s view is reasonable. “China is still a very difficult situation. They went from a horrific policy to a mediocre policy, that’s why markets have been relaxed,” Tepper said. “It’s still a problem out there and if the Fed went to a very hard tightening of rates until we do have a degree of inflation back, that could cause a problem for the world. The world is an interconnected place and they (The Fed) are right on the policy more or less.”

David Tepper lands in the number two spot on Forbes’ Money Masters list of the 40 most powerful people in the financial world. Forbes spoke to some of the other financiers who dominate the world of money and found many of them remain focused on interest rates and central bank policy.

 

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David Tepper

David Tepper