At a conference sponsored by S&P Global Ratings, well-known investor William Ackman said the U.S. is facing a “classic bubble” created by the Fed’s easy monetary policy, as reported in Reuters. Ackman, who runs the Pershing Square Capital Management hedge fund, believes the Fed needs to move quicker to tighten rates in order to fight inflation.

Ackman’s remarks come on the heels of the announcement that U.S. consumer prices rose 6.2% over the last year—higher than the forecasts from many economists. Pointing to the soaring prices in not only the stock market but also real estate and the art market, Ackman said “Every indicator is flashing red,” and posed the argument that easy monetary policy isn’t driving people back into the workforce, so there’s no real reason to maintain interest rates at their current low levels.

Ackman disagrees with many analysts who say the recent increases are transitory, saying that structural changes are fueling the high prices, such as ESG initiatives that demand higher wages and cleaner energy, which are costly. But those changes are here to stay, and policy makers should “taper immediately and begin raising rates as soon as possible,” the article quotes him.

Noting that inflation poses the biggest risk for his hedge fund this year, Ackman said at the conference that he’s hedged his portfolio amidst concern that higher rates could have a negative impact on the fund’s long-only equity portfolio—a valid concern given that his Pershing Square Holdings fund has returned 26.1% since the beginning of this year after a 70.2% gain in 2020.