Legendary Investor: Wach “Absolutely No Possibility” of Rate Cuts; AI Bull Market Can Continue for Another 1–2 Years
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Legendary Investor: Wach “Absolutely No Possibility” of Rate Cuts; AI Bull Market Can Continue for Another 1–2 Years
Hedge fund magnate Jones asserts that incoming Federal Reserve Chair Warsch will not cut interest rates.
Navigating Web3 tides with focused insightsSource: JINSHI Data
Paul Tudor Jones, billionaire hedge fund manager, delivered a striking statement in a Thursday CNBC interview: incoming Federal Reserve Chair Philip Jefferson will not cut interest rates—and may even consider raising them. At the same time, Jones remains bullish on the U.S. stock market’s AI-driven bull run, arguing that the current rally is still in its mid-phase and has another one to two years of upside—but will ultimately face a sharp correction.
Jefferson Unlikely to Cut Rates—May Even Hike
On the policy direction of incoming Fed Chair Philip Jefferson, Jones stated unequivocally: “Will he cut rates? Absolutely not.”
Jefferson has previously signaled openness to rate cuts. The Fed’s benchmark interest rate currently stands at 3.5%–3.75%, unchanged since December last year. Yet his dovish inclination faces strong resistance from the Federal Open Market Committee (FOMC): the most recent meeting saw the highest number of dissenting votes in nearly 34 years, with most regional Fed presidents opposing language in the post-meeting statement suggesting “further easing after three rate cuts by end-2025.”
Jones believes there are even grounds for a rate hike under current conditions: “I would consider hiking—of course, it depends on the data, but I’d definitely consider it. And I think he’ll be constrained ahead of the midterm elections.”
The current policy backdrop is complex: while the labor market has stabilized, inflation remains persistently above the Fed’s 2% target due to the Iran conflict and Trump-era tariff policies. According to CME Group’s FedWatch tool, futures traders expect the Fed to hold rates steady this year, with roughly equal—and low—probabilities assigned to both rate cuts and hikes.
AI Bull Market Still Has 1–2 Years Left, Historically Comparable to Past Tech Waves
On equities, Jones remains firmly bullish on the AI-driven bull market and revealed he has recently increased positions in related stocks. He draws parallels between today’s AI development and two prior major technological revolutions: “I believe the emergence of Claude—the large language model—in January this year is equivalent to Microsoft’s founding in 1981; and the current stage of AI adoption mirrors the period following Windows 95’s release in 1995, when internet commercialization accelerated.”
Jones notes that both prior tech revolutions triggered sustained “productivity miracles” lasting four to five and a half years, fueling long-term equity rallies. “This AI bull market is roughly 50% to 60% complete—so if I had to pick a timeframe, it could continue for another one to two years.”
In recent years, the U.S. stock market has repeatedly hit new highs on expectations of AI-driven transformation. Large-cap tech stocks tied to AI infrastructure have led gains, while chips, cloud computing, and generative AI firms have drawn concentrated capital flows—pushing the S&P 500 Index to repeated all-time highs.
Market May Face Sharp Correction—Comparable to Pre-Bubble 1999
Although optimistic about near-term prospects, Jones compares today’s market to the pre-bubble environment of 1999—roughly one year before the dot-com peak in early 2000. He warns: “Imagine the stock market rising another 40%. At that point, the U.S. equity market’s total value relative to GDP could reach 300%–350%, inevitably triggering a breathtaking, severe correction.”
As a macro trader, Jones says he employs a diversified basket strategy—and emphasizes: “I always look for historical precedents. Right now is an exceptionally unique period.”
He also issues a warning on AI’s long-term risks: “Governments will eventually need to step in and regulate AI. If left unchecked, artificial intelligence could pose a danger to humanity.”
Jones rose to prominence after successfully predicting—and profiting from—the U.S. stock market crash on Black Monday in 1987. He is also co-founder of the nonprofit Just Capital, which rates U.S. public companies based on social and environmental metrics.
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