Ark Invest CEO Cathie Wood said Tuesday that the U.S. is already in an economic downturn, and she admitted that she underestimated the severity and lasting power of inflation.

“We think we are in a recession,” Wood said on CNBC’s “Squawk Box” Tuesday. “We think a big problem out there is inventories… the increase of which I’ve never seen this large in my career. I’ve been around for 45 years.”

The innovation-focused investor said inflation has turned out to be hotter than she had expected due to supply chain disruptions and geopolitical risks.

“We were wrong on one thing and that was inflation being as sustained as it has been,” Wood said. “Supply chain … Can’t believe it’s taking more than two years and Russia’s invasion of Ukraine of course we couldn’t have seen that. Inflation has been a bigger problem but it has set us up for deflation.”

Inflation measured by the consumer price index rose 8.6% in May from a year ago, the highest increase since December 1981.

Wood said consumer is feeling the dramatic price increases as sentiment data fell to record lows. She pointed to the University of Michigan’s Surveys of Consumers, which showed a reading of 50 in June, the lowest level ever.

Wood has had a tough 2022 as her disruptive technology darlings have been among the biggest losers this year in the face of rising rates. Her flagship active fund Ark Innovation ETF (ARKK) is down a whopping 52% year to date, falling 66% from its record high.