Head of Greenlight Capital David Einhorn (Trades, Portfolio) raised his inflation forecasts, expecting inflation to quicken under former President Donald Trump's leadership.
"We have increased our bets on inflation," Einhorn said at the CNBC Delivering Alpha Conference. "I think we are going to have another inflection of inflation. I think we'll see more of that over the next few years."
Einhorn projects inflation rates of 3.5% to 4.5% in the coming year, noting that while he doesn't expect a return to previous high levels of 7%, 8%, or 9%, inflation could still rise significantly.
"It seems to be that we are going to have an expansionary policy," Einhorn explained. "They want to cut a lot of taxes."
Einhorn also speculated that changes in Trump's intended immigration policies might raise labor expenses, therefore aggravating inflationary pressures.
"I think the immigration policy that they're going to put in place is going to be inflationary for costs and for labor and stuff like that," he said. "I think we will have a bunch of inflation. What they're able to do or chose to do about that, I don't know. There's an argument for tolerating it and they may prefer too just to try to run the economy as hot as possible and live with the inflation."
