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Billionaire investor says market in ‘raging mania,’ inflation a threat

Financial markets are in a “raging mania” and rising inflation is a big threat, star investor Stan Druckenmiller said.

Inflation could eventually rise by as much as 10 per cent, Druckenmiller said on Wednesday in a CNBC interview, adding that the Federal Reserve has created conditions that have sent valuations soaring.

“Everyone loves a party but inevitably after a big party there is a hangover,” he said. “We are in a raging mania.”

“Right now, we’re in an absolute raging mania," says Stan Druckenmiller.

“Right now, we’re in an absolute raging mania,” says Stan Druckenmiller.Credit:Bloomberg

It’s been a rollercoaster week on Wall Street where stocks had been sold off for three straight sessions before halting their rout overnight. The losses were driven by a drop in technology shares as investors fled the big names that fuelled a historic five-month rally and traders sought safety in haven assets, pushing Treasury yields lower and strengthening the US dollar. However, markets rebounded overnight as dip buyers poured into beaten-down tech shares to send the Nasdaq 100 to its best day since April. The S&P 500 Index rose the most since June.

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