Citadel’s Ken Griffin says the Fed shouldn’t cut too quickly

Ken Griffin, Citadel founder and CEO, thinks the Federal Reserve ought to transfer slowly to chop rates of interest in its combat in opposition to cussed inflation.

“If I am them, I do not need to minimize too rapidly,” Griffin mentioned on the Worldwide Futures Business convention in Boca Raton, Florida on Tuesday. “The worst factor they may find yourself doing is reducing, pausing after which altering route again in direction of greater charges rapidly. That may, for my part, be essentially the most devastating plan of action that they may pursue.”

“So I believe they’ll be a bit slower than what folks have been anticipating two months in the past in reducing charges. I believe we’re seeing that play out,” he added.

His remark got here as knowledge confirmed inflation rose once more in February, with the patron value index climbing barely greater than anticipated on an annualized foundation. The uptick in value pressures may preserve the Consumed course to attend a minimum of till the summer time earlier than beginning to decrease rates of interest.

The billionaire investor mentioned there are vital inflationary forces in place that preserve costs elevated.

“We nonetheless have an infinite quantity of presidency spending. That is professional inflationary. And we’re additionally going to a interval in historical past of deglobalization. So we have two massive, massive tailwinds that proceed to help the inflation narrative,” Griffin mentioned.

Whereas the inflation charge is effectively off its mid-2022 peak, it nonetheless stays effectively above the Fed’s 2% aim. Fed officers in latest weeks have signaled that charge cuts are probably sooner or later this 12 months and have expressed warning about letting up too quickly within the battle in opposition to excessive costs. 

The Fed’s subsequent two-day coverage assembly takes place in per week.

Citadel’s flagship multistrategy Wellington fund gained 15.3% final 12 months.