Carl Icahn at the 6th annual CNBC Institutional Investor Delivering Alpha Conference on September 13, 2016.

Heidi Gutman | CNBC

Famed investor Carl Icahn believes the U.S. economy is in difficulty since of poor corporate leadership and stubbornly higher inflation.

“The method is breaking down, and we totally have a significant difficulty in our economy nowadays,” Icahn mentioned on CNBC’s “Closing Bell” Tuesday. “1 of the worst nations in the globe as far as corporate governance.”

Icahn has been a longtime activist investor and corporate raider, creating profit from forcing modifications to corporate policy. He credited his results to his capacity to take benefit of questionable governance at the corporate level.

“Leadership is worse than mediocre. And that is why we’re so productive. I imply, not since we’re geniuses, but since you go into a firm nowadays … It is truly horrible what you uncover,” Icahn mentioned.

Meanwhile, Icahn mentioned a further significant situation in the economy proper now is surging inflation and the Federal Reserve has no selection but preserve raising prices to squash it.

“I feel Powell truly has to raise interest prices sooner than later,” Icahn mentioned. Inflation is the worst point the economy can have…. I do not feel you have a selection. If you do not preserve going on, I truly think that the difficulty of inflation can turn out to be such that it is pretty, pretty hard to get out of it.”

Inflation rose once more in February with the customer cost index growing .four%. The annual inflation price is now at six%, which will most likely preserve the Fed on track for a further interest price hike subsequent week, regardless of current banking market turmoil.