Since Trump's election, David Einhorn has boosted his market bets on inflation.

• David Einhorn, a well-known hedge fund manager, stated at the CNBC Delivering Alpha investor summit on Wednesday that he has increased his market bets on inflation due to his belief that Trump's second term policies could cause the economy to overheat and the administration would tolerate it.
• The consumer price index could be pushed back into the 3% to 4.5% range due to tax cuts and an immigration crackdown, but not to the same level of inflation seen in recent years.

David Einhorn, Greenlight Capital president, stated that the election results were positive in terms of maintaining political stability, but for the economy, a significant challenge lies ahead due to his expectations of Trump's second-term policies leading to higher inflation.

"We have boosted our confidence in inflation," he stated to CNBC's Leslie Picker at the Delivering Alpha investor summit on Wednesday. "Another inflationary inflection is expected," he added. "The proposed policy mix will contribute to this trend, and we can expect to see more of it in the near future."

The U.S. economy's inflation rate is predicted to return to 3.5%-4.5%, but not to the 7%-9% level that was the worst in four decades.

Both the latest CPI and wholesale inflation data, released on Wednesday and Thursday respectively, were in line with market expectations.

Trump's tax cuts will lead to inflation, even if he does not pursue all of them or Congress refuses to pass them all, due to the combination of some tax cuts in a strong economy with wage growth and an inflationary immigration policy.

"I don't know what they will do about it, but there are arguments for tolerating it and running the economy hot," he said.

Although Einhorn has expressed concerns about the market's high valuations and considers himself a value investor in a "broken market," he is not bearish on the stock market. He has made a bet on an agricultural stock that he believes is undervalued and represents a bargain.

Nelson Peltz, CEO of Trian Partners and billionaire investor, stated at the DA that although he is pleased with Trump's victory and views a potential Harris administration as a disaster, the market's rally cannot continue indefinitely, and the extreme concentration among a small group of high-momentum stocks is a significant factor. "There are two distinct markets," he said. "On one hand, you have 20 companies that are swinging the cat around the room. On the other hand, you have other companies."

Despite the Fed's rate cuts, Einhorn believes the bond market has not yet priced in the "difficult Treasury bond yield situation" resulting from his concerns about Trump's expansionary economic policy.

Guggenheim Partners Investment Management chief investment officer Anne Walsh cited this specific concern at DA, predicting that bond yields will remain under pressure and the bond market will experience higher volatility than stocks for several years due to various factors, including concerns about tax cuts and deficit spending.