Dawn Fitzpatrick, chief investment officer for Soros Fund Management, described a recession as “inevitable” in a recent interview, but noted that she was not overly concerned about the general health of the economy.
“The bottom line is a recession is inevitable - it’s a matter of when,” said Fitzpatrick in an interview with Bloomberg Business on Tuesday.
“There is no doubt that interest rates are going to go higher, and the Fed is going to move very, very quickly,” Fitzpatrick continued.
“That said, interest rates net of inflation are still negative, so monetary policy is still really easy, so again I do think rate increases will slow the economy and will impact inflation, but I think this economy has some shock absorbers built in that will allow that to happen … I don’t think we’ll avoid a recession, I just think it will be further out than people expect.”
Fitzpatrick was also asked about the risk of further economic damage occurring as a consequence of Russia’s continuing invasion of Ukraine, which she said would not be a major liability for the United States, as the country remains uniquely insulated from the developments in Eastern Europe.
Interestingly, Fitzpatrick claims that climate impact will increasingly come into focus. This could hamper the adoption of Bitcoin, which relies on the energy-guzzling proof-of-work consensus algorithm. Ethereum is expected to dramatically reduce its power consumption by transitioning to proof-of-stake later this year and so Fitzpatrick believes "ethereum is likely to gain some more traction over bitcoin."
Overall, she believes that crypto "is here to stay", adding that it has gone mainstream. The manager of billionaire George Soros’s fortune is also convinced that blockchain is going to have some great applications.
Last October, Fitzpatrick confirmed that Soros' family fund owned some Bitcoin.
Fitzpatrick has served as the head of the family office of Hungarian-American financier George Soros since 2017. The majority of Soros’s assets are tied up in the Open Society Foundation, an organization that invests money into philanthropic and political causes to advance the technocratic vision of the philosopher Karl Popper, who coined the term “Open Society.”
As stock markets continue to slump and the economy seemingly lags in the face of inflation and supply chain complications, a growing chorus of experts have begun to use a certain r-word more liberally. But while a growing chorus of experts has come to view a recession as likely or even necessary to stymie inflation, opinions vary on the potential severity of a looming economic downturn.
Fitzpatrick’s remarks are echoed by other professionals in banking, business, and economics. Former Goldman Sachs CEO Lloyd Blankfein has described a “very, very high” risk of a recession, while Wells Fargo head Charlie Scharf said there was “no question” that the economy would see a downturn in the near future.
Watch the full interview below: