During 2022, Wall Street repeatedly warned investors that a recession could be on the way.
From JPMorgan Chase CEO Jamie Dimon to former Federal Reserve officials, the world’s top economic minds have taken notice, practically in unison, of the storms facing the global economy and have weighed in informed of the possibility of a downturn.
In the United States, consumers are faced with close Inflation at 40 year high and rising interest rates, while the world struggles to cope with the war in Ukraine, Europe’s energy crisis, China’s zero-sum COVID policies, and more.
And even after the S&P 500 has fallen more than 21% this year, the good minds of Wall Street still think stocks need to fall even more.
“The worst is yet to come,” Carl Icahn, chairman of Icahn Enterprises and whose net worth is $23 billion, told MarketWatch at the Best New Ideas in Money Festival on Wednesday.
Icahn made his name as a Corporate Raider on Wall Street in the 1980s, buying unloved companies and advocating strongly for change to improve shareholder value by appointing board members, selling assets, or firing employees.
Even at 86, Icahn remains one of the most respected minds on Wall Street, and this year he repeatedly warned the US economy and stock market were in trouble.
The investor argues that the Federal Reserve raised asset prices to unsustainable levels amid the pandemic using near-zero interest rates and quantitative easing – a policy in which central banks buy mortgage-backed securities and government bonds with the hope of lending and encourage investment.
“We printed too much money, and we thought the party would never end,” he said, adding that he now believes the party is over when the Fed changed its stance and raised rates to fight against inflation.
The hangover from the Fed’s loose monetary policies, according to Icahn, is sky-high inflation, which rose 8.3% from a year ago in August.
“Inflation is terrible. You can’t cure it,” Icahn said, noting that rising inflation was one of the main factors that brought down the Roman Empire.
Hyperinflation was notorious in Rome after a series of emperors lowered the silver content of their currency, the denarius. The situation then worsened after Emperor Diocletian instituted price controls and a new coin called the argenteus, which was equal in value to 50 denarii.
The unsustainable policies of the Roman emperors resulted in an inflation rate of 15,000% between AD 200 and 300, according to the estimate of some historians.
Icahn said inflation like this worries him so much that he wants the Federal Reserve to raise interest rates by a full 1% on Wednesday, instead of the 75-basis-point hike announced by Chairman Powell, to ensure that price increases be removed. ‘t stick around.
But despite Icahn’s inflation concerns, the billionaire investor said he outperformed his peers by hedging his portfolio – a strategy that uses derivatives to limit market risk and increase profits – during the market downturn.
The net asset value of Icahn Enterprises jumped 30% or $1.5 billion in the first six months of 2022.
On Wednesday, Icahn insisted that there are still stocks that look attractive in the market today, but warned investors not to get too greedy too soon.
“I think a lot of things are cheap, and will get cheaper,” Icahn said, arguing that companies in the oil-refining and fertilizer businesses should outperform the overall market going forward.
Wednesday’s warning to investors was not the first from Ichan this year.
The billionaire warned back in September that a recession or “even worse” was likely on the way for the US economy and compared today’s high inflation to that of the 1970s, arguing that the Fed will struggle to control rising consumer prices.
“You can’t get that genie back in the bottle too easily,” he said.
This story originally appeared on Fortune.com