‘The economy is breaking hard’ and CEO confidence is miserable, says billionaire Barry Sternlicht

The U.S. system is teetering connected the brink of superior downturn if the Federal Reserve doesn't pump the brakes connected its complaint hikes, billionaire CEO Barry Sternlicht said.

The cardinal slope has already raised involvement rates 4 times this twelvemonth and is wide expected to hike them by 75 ground points adjacent week successful an effort to tame inflation. Earlier this week, consumer prices roseate 0.1% alternatively of the 0.1% decline economists surveyed by Dow Jones were expecting.

However, Sternlicht believes the Fed was precocious to the crippled and is present being excessively aggressive.

"The system is breaking hard," the president and CEO of Starwood Capital Group told CNBC's "Squawk Box" Thursday.

"If the Fed keeps this up they are going to person a superior recession and radical volition suffer their jobs," helium added.

Consumer assurance is unspeakable and CEO assurance is "miserable," Sternlicht said. Supply concatenation issues are being resolved, and inventories are present backing up successful warehouses, which volition pb to immense discounting, helium said.

"The CPI, the information they are looking astatine is aged data. All they person to bash is telephone Doug McMillon astatine Walmart, telephone immoderate of the existent property fellas and inquire what is happening to our flat rents," helium said, pointing retired that the complaint of rent maturation is present slowing.

The continuation of complaint hikes volition besides origin a "major crash" successful the lodging market, Sternlicht predicted. The once-hot existent property marketplace is swiftly slowing down, with owe rates for a 30-year fixed indebtedness implicit 6% — up from 3.29% astatine the commencement of the year, according to Mortgage News Daily.

While the Fed's people is 2%, ostentation should tally astatine 3% to 4%, Sternlicht said.

"Inflation that is driven by wage maturation is fabulous. We should privation wages to spell up," helium said.

"You tin wage higher rents, you tin bargain your equipment, you tin spell to the edifice if you person precocious wage growth."

As for erstwhile the "serious recession" volition hit, Sternlicht believes it is imminent.

"I deliberation [in the] 4th quarter. I deliberation close now," helium said. "You are going to spot cracks everywhere."