Pershing Square Activist Presentation Deck
Differentiated View on Interest Rates
We initially purchased interest rate hedges in late 2020 and early 2021, as we
believed the Fed would need to raise rates much earlier than the market anticipated
Headline
Unemployment Rate
6.7%
December 2020
(280) bps
3.9%
December 2021
CPI Inflation
(%YoY Change)
560 bps
1.4%
7.0%
December 2020 December 2021
December 2022
Fed Funds Forward Rate(1)
0.125%
No Rate Hike
Implied
As of 12/31/2020
1.380%
~5 Rate Hikes
Implied
Current
We expected a combination of aggressive fiscal and monetary policy, vaccines, and the reopening
of the economy would lead to full employment and heightened inflation
(1) As implied by the 30-Day Fed Funds futures contract expiring on December 31, 2022 and traded on the Chicago Mercantile Exchange. Current Fed Funds forward rate is as of
2/8/2022. Pricing Source: Bloomberg (FFZ2 Comdty).
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