Hedge fund manager Kyle Bass warns U.S. is headed for stagflation

Kyle Bass, founder of Hayman Capital Management, on Wednesday warned that the U.S. is headed toward stagflation where economic growth remains subdued amid higher prices. "2017 is the year of increasing inflation and the economy lagging," said Bass in an interview with CNBC, noting that consumer prices are picking up and wages and real estate prices are rising. "It's a stagflation environment" and people will have a hard time generating positive returns, he said, urging investors to avoid long-duration bonds. The hedge fund manager also reiterated his view that China has already reached the point where it is a problem due to excessive debt buildup and that China's financial woes will drag on global growth. Meanwhile, Bass made no secret of whom he is supporting in the election, referring to Republican nominee Donald Trump as a "circus clown." "Hillary is the only thing we got," he said.

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