10 października, 2022

Billionaire hedge fund manager Paul Tudor Jones says a 'recession playbook’ would see stocks fall by another 10%

The already-battered stock market will face further pressure under a „recession playbook” laid out by billionaire investor Paul Tudor Jones. 

„That playbook is: most recessions last about 300 days from the commencement of it; the stock market is down, say, 10%; the first thing that will happen will be short rates will stop going up and will start going down before the stock market actually bottoms,” he said in a CNBC interview that aired Monday.

The founder and chief investment officer of Tudor Investment said the US economy may have entered into a recession one or two months ago but an official declaration will come from the National Bureau of Economic Research. 

„We’re probably getting ready to go through the recession playbook,” Jones said. 

The world’s largest economy contracted by 0.6% in the second quarter of 2022, according to the Commerce Department. That came on the heels of gross domestic product shrinking by 1.6% in the first quarter. The first GDP estimate for the third quarter is due on October 27. 

US stocks this year have tumbled into a bear market as investors anticipate the Federal Reserve’s fast pace of hefty rate hikes to cool inflation will lead to a so-called hard landing for the economy. The S&P 500 has lost about 24% and the Nasdaq Composite has slumped by nearly 33%. 

„I would say when we get into that recession, there will be a point when the Fed stops hiking,” Jones said. „There will be a point when it starts to either slow down or, even at some point, it’ll reverse those cuts. And when that happens you’ll probably have a massive rally in a variety of beaten-down inflation trades, including crypto.” 

He said he has a „minor” allocation to bitcoin. „I’ve always had a small allocation to it.” 

Bitcoin has dropped by nearly 60% this year and traded around $19,190 on Monday. In November, it hit an all-time high above $68,000 before falling into a „crypto winter” of depressed prices in the market for digital assets. 

Next month, the Federal Reserve is widely expected to raise interest rates for the sixth time this year. The fed funds rate has been yanked up to a range of 3% to 3.25% from 0%. 


  1. Alanna Wehner

    I am very grateful that you enlightened me, and, most importantly, just in time. To think, I’ve been on the Internet for six years, but this is the first I’ve heard of it.

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