Investor Cathie Wood said the U.S. economy may be in for a “shudder” as it adjusts from an environment of decreasing interest rates to one where interest rates are rising.
Wood, the CEO of ARK Invest, said sometime in the next year there will be a shift toward rising interest rates, even as the Fed is widely predicted this week to cut rates for the second time this year.
When this happens, “there will be a shudder,” Wood told CNBC, even though history shows higher interest rates aren’t necessarily correlated with lower innovation, which fuels market gains.
“Even in 2017 when interest rates went up, we had phenomenal performance,” said Wood. “I want to disabuse people of that notion. But nonetheless, the way algorithms work these days, we think that there will be a reality check.”
Wood said she is not deterred by the possibility of a stock market pullback, and ARK Invest is continuing to invest in innovation plays around robotics, AI, blockchain, and energy storage.
