'The Fed screwed up': Real estate billionaire Sam Zell just warned that hot infl...

With headline inflation figures coming down and a strong labor market, some say that the U.S. economy could be on its way back up.

But billionaire investor Sam Zell does not share that optimism.

Don't miss

• Here's how much the average American 60-year-old holds in retirement savings — how does your nest egg compare?

• 'Hold onto your money': Jeff Bezos issued a financial warning, says you might want to rethink buying a 'new automobile, refrigerator, or whatever' — here are 3 better recession-proof buys

• UBS says 61% of millionaire collectors allocate up to 30% of their overall portfolio to this exclusive asset class

“When you spread out free money for years at a time, you create significant drag, and I just don’t see how we are going to avoid a slowdown as that whole process comes to an end,” he says in a recent interview with CNBC.

According to Zell, the problem lies with the U.S. Federal Reserve's easy money policies.

“I think the Fed screwed up by allowing zero interest rates to go on too long, I think we are just beginning to pay the price for that,” Zell points out. “It would be nice to say that it would be great if the Fed got lucky. I’ve been around for 50 years and I’ve never seen the Fed get lucky.”

To be sure, consumer prices in the U.S. rose 6.5% from a year ago in January 2023 — down from their peak 9.1% increase in June 2022. But inflation remains a big concern for Zell.

“Is the definition of coming down going from 9[%] to 6[%]?” Zell asks. “The point is 6[%] is a serious problem.”

And while some believe it’s time to get ready for disinflation, Zell believes that price levels could stay elevated.

“Preparing for disinflation would be a very optimistic thing to do at this point. It's going to take a while for the inflation pressures to ease, and I think that's what we have to look forward to.”

If you share Zell’s view, here’s a look at three assets that can help investors fight inflation.