Ark Invest founder and CEO Cathie Wood is drawing snarky comments on and off Twitter after posting an open letter to the Federal Reserve challenging the central bank's aggressive interest-rate hikes.
Wood published the letter on her firm's website Monday as her ARK Innovation ETF (ARKK) sustained more blows in a year that has seen its returns slide more than 60%. Bloomberg reported Tuesday that the fund, which has fallen more than double the S&P 500′s decline, was down about 11% over three days.
Wood voiced concern the Fed is making a policy error that will lead to deflation and said it seemed to be basing its decisions on two lagging indicators: employment and headline inflation from official reports such as the Consumer Price Index. These variables "have been sending conflicting signals and should be calling into question the Fed's unanimous call for higher interest rates," she wrote.
"Could it be that the unprecedented 13-fold increase in interest rates during the last six months — likely 16-fold come November 2 — has shocked not just the US but the world and raised the risks of a deflationary bust?" Wood asked.
While Wood is hardly alone among economists and investors in criticizing the Fed's steep rate hikes this year, market watchers were quick to respond.
Business journalist Charles Gasparino tweeted: "Cathie Wood is complaining that the Fed isn't keeping the stock market bubble going. And it's not a story from @TheOnion."
CMG Venture Group also mocked the open letter on Twitter: "The only way our fund survives is if you cut interest rates to 0 and turn on the money printer again."
A parody account called Not Jerome Powell, or @alifarhat79, showed a video with two guys falling down laughing and the line: "The Fed after reading Cathie Wood's open letter."
The Fed after reading Cathie Wood's open letter pic.twitter.com/FeqlEWGobT
— Not Jerome Powell (@alifarhat79) October 10, 2022
Genevieve Roch-Decter, CFA, tweeted Tuesday afternoon: "Cathie Wood's open letter to the Fed clearly isn't working. She should try writing it again in all caps to really get the point across."
Concoda added to the sarcasm stream, tweeting: "BREAKING: *THE FED WRITES OPEN LETTER TO CATHIE WOOD ASKING HER TO DROP ZOOM AND ROKU FROM ARK 'INNOVATION.'"
While Wood's critics took the opportunity to pounce, Barron's noted Tuesday that she's not alone in her views on the Fed, pointing out that Wharton economist Jeremy Siegel and billionaire Barry Sternlicht have warned the central bank could cause widespread economic harm.
