Citadel CEO Ken Griffin says inflation may have peaked but a recession is coming. “We’re in a very uncertain time for investors,” the executive cautioned, adding that the Federal Reserve “is grappling with a level of inflation we haven’t seen in a long time.”
Citadel’s Ken Griffin on U.S. Economy, Inflation, Recession, and Cryptocurrency
Kenneth Griffin, founder and CEO of global investment firm Citadel, shared his views on a variety of topics, including the U.S. economy and cryptocurrency, at the CNBC Delivering Alpha conference Wednesday.
“It’s a very uncertain time,” he began. “We are grappling with the threat of nuclear war in Ukraine. We’re grappling with unprecedented central bank interventions. We’re grappling with record-high inflation in the United States in our lifetimes. We’re in a very uncertain time for investors,” Griffin stressed.
Noting that the U.S. equity market is showing “a level of resiliency” and the U.S. economy “is still strong,” he asserted:
We’re probably looking at peak inflation having just occurred or just about to occur. So the forward trajectory on a number of key fronts looks somewhat better domestically, again, assuming nothing goes totally off the rails abroad.
Regarding whether the U.S. economy will slide into a recession, he opined: “Everybody likes to forecast recessions, and there will be one, it’s just a question of when and, frankly, how hard.”
The Citadel boss continued: “And is it possible that end of ’23 we have a hard landing? Absolutely.” He further shared that his investment firm is “very focused on the possibility of a recession” as part of risk management.
“The Fed is grappling with a level of inflation we haven’t seen in a long time. They have a very limited toolkit,” Griffin stressed, warning that the Federal Reserve can raise interest rates but it “has very adverse consequences,” such as to home builders and auto manufacturers. However, the executive believes that “right now, the American consumer is feeling pretty good about where things stand on an absolute basis.”
The Citadel founder proceeded to talk about Europe. “There’s a war in Europe. There is record inflation,” he said, adding:
Europe is probably already in a recession because of the high cost and scarcity of energy.
Nonetheless, he pointed out that while the market is down, “it’s not down as much as you probably would have thought if you looked at the news headlines.”
Griffin was also asked about cryptocurrency. “There’s a bit of an intergenerational fight here,” he began. “I see my younger colleagues much more crypto-centric than my older colleagues, and for good reasons, including, ironically, sort of a libertarian view of the world.” The Citadel CEO described:
As our government gets bigger and bigger, a certain number of people sort of feel like, you know what, I want the privacy … want to pull away from government.
“So what’s interesting is we see people pulling away from big governments when they look at assets like cryptocurrency, which is a real irony given how people view government can solve so many other problems,” he concluded.
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