Ken Griffin, CEO of Citadel, says inflation may have peaked but a recession is coming. “We are in a very uncertain time for investors“, the executive warned, adding that the Federal Reserve “is grappling with a level of inflation we haven’t seen in a long time.“
Citadel’s Ken Griffin talks about the U.S. economy, inflation, the recession, and crypto-currencies.
Kenneth Griffin, founder and CEO of investment firm Citadel, shared his views on a variety of topics, including the U.S. economy and crypto-currencies, at the conference CNBC Delivering Alpha Wednesday.
“It is a very uncertain period“, he began. “We are grappling with the threat of nuclear war in Ukraine. We are grappling with unprecedented central bank intervention. We are grappling with record inflation in the United States in our lifetime. We are living in very uncertain times for investors“, Griffin noted.
Noting that the U.S. stock market shows “a certain level of resilience” and that the U.S. economy “is still strong“, he stated:
We’re probably looking at the inflation spike that has just occurred or is about to occur. So the forward trajectory on a number of key fronts looks a little bit better domestically, assuming nothing goes totally off the rails overseas.
On the question of whether the U.S. economy will enter a recession, he said, “Everyone likes to predict recessions, and there will be one, it’s just a matter of when and, frankly, how bad.“
Citadel’s boss continues: “And is it possible that at the end of ’23 we will have a hard landing? Absolutely.“He further shared that his investment company is “very focused on the possibility of a recession” in the context of risk management.
“The Fed is grappling with a level of inflation we haven’t seen in a long time. It has a very limited toolbox“, Griffin noted, warning that the Fed can raise interest rates, but that it “has very negative consequences“, particularly for home and auto manufacturers. However, the executive believes that “right now, the U.S. consumer is feeling pretty good about the current situation on an absolute basis.“
The Citadel founder went on to talk about Europe. “There is a war in Europe. There is record inflation“, he said, adding:
Europe is probably already in recession because of the high cost and scarcity of energy.
Nevertheless, he pointed out that if the market is down, “it’s not as bad as you’d probably think by looking at the headlines.“
Griffin was also asked about crypto-currencies. “There’s a bit of an intergenerational struggle here“, he began. “I see my younger colleagues as much more crypto-centric than my older colleagues, and for good reason, including, ironically, a kind of libertarian worldview.“Citadel’s CEO described:
As our government gets bigger and bigger, a number of people feel like, you know what, I want privacy … I want to get away from the government.
“So what’s interesting is that we’re seeing people move away from big government when they look at assets like crypto-currencies, which is a real irony given that people see government as being able to solve so many other problems“, he concluded.