Sam Boughedda

Cathie wood, who spoke to Bloomberg Wednesday morning, said that inflation will recede because of the enormous inventories US businesses currently have.

Bloomberg heard from Ark Investment Management chief executive: “I’ve not seen inventory surges such as this in my professional career, and I have been around for quite some time.”

“This inventory issue highlights the cyclical reason we’ve been saying we think inflation will unravel,” she added.

This was demonstrated by Target Corporation (NYSE): The inventory pileup that led to the reduction of its profit outlook caused by a drop in profitability. Large stockpiles have been built up by retailers due to rising demand. This has resulted in large inventories.

As reported earlier this week, Wood’s Ark’s assets have suffered a significant drop this year. However, while inflation fears have gripped markets, Wood told Bloomberg that “the greater risk by far is deflation.”

Wood also talked to Bloomberg about Tesla (NASDAQ :), which Ark invested heavily in. She commented on Tesla’s CEO Elon Musk splitting his time between different projects, stating that it’s crucial he stays at Tesla to oversee the autonomous driving segment.

“He doesn’t need to stick around for the EV side of it, he needs to stick around for the autonomous side,” said Wood.