The U.S. is headed toward a recession with stubbornly high inflation, according to hedge-fund manager Kyle Bass. The chief investment officer of Hayman Capital Management said Thursday on CNBC's " Squawk Box " that he's pessimistic about the path of the U.S. economy as prices continue to rise at the fastest rate in 40 years and there are some signs of slowing growth. "I think that we're in a scenario where there's a stagflationary environment. I think the economy's going to cool off, and I think we'll have a recession by the end of this year or the beginning of next year. And we'll still have rising food prices and rising energy prices," Bass said. He added, however, that he thought any recession would be "shallow." "Stagflation" is a term most commonly associated with the 1970s, when the U.S. struggled with meager economic growth and sky-high inflation. It was also one of the worst decades on record for investors. Economic data has been mixed in recent weeks. Thursday's revised reading for first-quarter GDP showed a decline of 1.5%, slightly worse than previously reported. However, jobless claims declined last week, and most economists expect the second quarter to show a return to economic expansion. The Federal Reserve has begun to hike interest rates to calm inflation, aiming for a so-called "soft landing" that avoids a recession. However, Bass said he is skeptical that the Fed will be able to hike rates high enough to make a major impact on inflation and added that the central bank is still too optimistic about economic growth. "The next three quarters would have to average over four percent growth to hit the Fed staff's target of 2.8%. That's just not going to happen," Bass said.