Cathie Wood says the exodus from expensive cities will keep a lid on inflation

Cathie Wood shot to fame in 2020 on the back of winning tech bets.

  • Cathie Wood has said the exodus from expensive cities during COVID should help hold down inflation.
  • Wood reckons strong inflation will be transitory, and has said she expects commodities to cool next year.
  • Her company, Ark Invest, is moving to St. Petersburg, Florida in November, from New York.

Superstar investor Cathie Wood has put forward one reason why strong inflation might not last: people are fleeing expensive cities like New York for cheaper ones.

Wood’s own company Ark Invest is relocating from New York to St. Petersburg, Florida in November.

She said on Tuesday at an Ark webinar that the cost of living in St. Petersburg “is anywhere from 20% to 40% less than in New York City and that includes the rents,” according to comments reported by CNBC.

“The exodus, or the great migration, is from the very high-rent areas of the world to much lower rents. So there’s going to be a mix effect that many are not taking into account as they’re thinking about inflation,” she said.

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During the coronavirus pandemic many people left densely populated cities. Working from home meant a company’s workers didn’t have to all be in the same place, while many people wanted more space and greenery.

Human resources company ADP found at the start of this year that 30% of remote workers in the US had changed their living arrangement during the pandemic, while another 29% were considering a change.

ADP said cities such as New York, San Francisco, Los Angeles and Miami were seeing “an exodus.”

Wood, who founded and is CEO of Ark Invest, is not worried about inflation, despite it coming in above 5% for the last three months in the US.

She has argued commodity prices should fall in 2022 and innovation should keep things cheap over the longer term.

Wood is moving Ark Invest to St. Petersburg because she sees it as an innovation hub, according to CNBC. “We believe that St. Pete wants to become the next Austin and attract tech companies, attract innovation,” she said.