By Svea Herbst-Bayliss

(Reuters). Reuters: William Ackman, an investor whose opinions are often closely followed on Wall Street’s Wall Street, stated on Thursday that the U.S. central banking’s extremely loose monetary policy had created a “classic Bubble” and that he believes the Federal Reserve needs to raise rates quickly in order to reduce inflation.

“We are in a classic bubble which has been driven by the Fed,” Ackman, who runs hedge fund Pershing Square Capital Management, said at a conference sponsored by S&P Global (NYSE:) Ratings.

Ackman spoke days after the government revealed that U.S. consumer price inflation in October rose 6.2% during the past 12 months. This was higher than many economists had predicted.

Ackman stated that “every indicator is flashing red”, referring to surging real estate prices, art and stock markets.

He stated that inflation is the largest risk his hedge fund faces this year.

Ackman indicated that he believes the Fed would have to tighten faster. Ackman also stated that interest rates should be kept at the current low level. Ackman argued that people were not returning to the work force by having an easy monetary policy.

He said that higher prices were being driven by structural change and recent increases are not temporary as economists, policymakers, and corporations claim.

ESG initiatives include a move to cleaner energy, higher wages and higher taxes. They are likely to continue and be costly for some time, Ackman noted, adding that higher prices will result.

Ackman posted on Twitter last month, that he was being invited to make a presentation at the Federal Reserve Bank of New York. His views on inflation were shared and that Ackman suggested that policy makers “taper immediately” and increase rates as soon possible.

His portfolio was hedged, and he was concerned that higher rates would negatively affect the long-only equity portfolio. He reiterated this on Thursday. After a gain of 70.2% last year, Ackman’s Pershing Square Holdings Fund returned 26.1% in January.