Cathie Wood Sees Inflation Falling, Deflation as the Greater Risk as Inventories Spike By Investing.com

By Sam Boughedda

Speaking to Bloomberg on Wednesday, Cathie Wood said the immense inventories now held by US businesses indicate that inflation will subside.

The chief executive of Ark Investment Management told Bloomberg: “I’ve never seen inventory surges like this in my career and I’ve been around for a long time.”

“This inventory issue highlights the cyclical reason we’ve been saying we think inflation will unravel,” she added.

As demonstrated by Target Corp (NYSE:), whose inventory pile-up prompted a cut in its profit outlook, retailers have accumulated significant stockpiles due to soaring demand, resulting in bloated inventories.

As reported earlier this week, Wood’s Ark’s assets have suffered a significant drop this year. However, while inflation fears have gripped markets, Wood told Bloomberg that “the greater risk by far is deflation.”

Wood also spoke to Bloomberg about Tesla (NASDAQ:), a company Ark has invested heavily in previously. She commented on Tesla’s CEO Elon Musk splitting his time between different projects, stating that it’s crucial he stays at Tesla to oversee the autonomous driving segment.

“He doesn’t need to stick around for the EV side of it, he needs to stick around for the autonomous side,” said Wood.