Ken Griffin, Citadel on CNBC’s Delivering Alpha, September 28, 2022
Scott Mlyn | CNBC
Ken Griffin, founder and CEO of Citadel, believes the Federal Reserve should slowly lower interest rates to combat persistent inflation.
“If I do, I don’t want to cut them too quickly,” Griffin said at the International Futures Industry Conference in Boca Raton, Florida, on Tuesday. “The worst thing they could end up doing is cutting, pausing, and then quickly changing direction back to higher rates. In my opinion, that would be the most destructive course of action they could take.”
“So I think they will cut rates a little slower than people expected two months ago. I think we’re seeing that happen,” he added.
His comments came after data showed inflation rose again in February and the consumer price index rose slightly higher than expected year on year. Rising price pressures could force the Fed to wait until at least the summer before cutting interest rates.
The billionaire investor said there are significant inflationary forces that are keeping prices high.
“We still have a huge amount of government spending. This contributes to inflation. And we are also approaching a period in history of deglobalization. So we have two big, big tailwinds that continue to support the inflation narrative,” Griffin said.
While the inflation rate is far from peaking in mid-2022, it still remains well above the Fed’s 2% target. Fed officials have signaled in recent weeks that a rate cut is likely at some point this year and have expressed caution about stopping the fight against high prices too early.
The Fed’s next two-day meeting will take place in a week.
Wellington’s flagship multi-strategy fund Citadel gained 15.3% last year.