Citadel's Griffin says cooling inflation could lead to Fed rate cuts this summer (updated)
30/01/2024 17:03
(Adds commentary on deficit, other details in paragraphs 2-9)
Jan 30 (Reuters) - Cooling inflation in the United
States gives the Federal Reserve room to potentially start
cutting interest rates this summer, Citadel founder and
billionaire investor Ken Griffin said on Tuesday.
The timing of potential rate cuts has been the subject of
speculation and debate in the markets for months. Most traders
expect the central bank to kick off the cuts in May.
Data released by the Commerce Department last week showed
U.S. prices rose marginally in December, keeping the annual
increase in inflation below 3% for a third consecutive month.
Griffin, however, cautioned against the growing fiscal
deficit in the U.S., a risk that several business leaders have
ranked as one of their chief concerns about the economy.
"We are still engaged in a reckless level of federal
spending. That is creating a very different backdrop for the
economy than any point in prior history," he said at the Managed
Funds Association Network conference in Miami.
The federal government not cutting back on its spending
could lead to a loss of confidence in the creditworthiness of
the U.S. in 7 to 10 years, which is the "biggest systemic risk"
the economy is staring at, he added.
In the wide-ranging interview, Griffin also attacked the
perceived anti-business stance of President Joe Biden's
administration.
"This administration seems to be very focused on regulations
that reduce the access to public market capital.... or make it
more expensive to run a business," he said.
Griffin's hedge fund giant Citadel is among the biggest in
the U.S. Last month, Reuters reported the fund was planning to
give back $7 billion of profits to its investors after a year of
double-digit returns. It had also done so the previous year,
when it posted a record profit.
(Reporting by Niket Nishant in Bengaluru; Editing by Krishna
Chandra Eluri)
((Niket.Nishant@thomsonreuters.com;))