Ken Griffin Still Sees Fed Cuts Ahead, Even If It’s December

07/05/2024

Ken Griffin

(Bloomberg) — Citadel founder Ken Griffin said the Federal Reserve will likely cut rates in December if it elects to hold off in September, predicting a move this year even as the central bank has tracked with his calls for a cautious approach.

“There is still a question of will inflation actually decelerate enough by then,” Griffin said Monday at the Milken Institute Global Conference in Beverly Hills. Wage growth and de-globalization “take away from the constant deflationary trend that has helped the pricing of goods for frankly most of our adult lifetime.”

In a wide-ranging interview, Griffin also praised the names being mentioned as Donald Trump’s possible Cabinet picks, expressed his support for Ukraine and said he would curtail his donations to Harvard until the school recommits itself to “meritocracy.”

In March, Griffin said the Fed should move slowly in lowering rates to avoid the possibility of having to raise them later. The central bank has to balance keeping inflation in check as the economy continues to grow, which “has made the Fed’s job much harder,” he said Monday.

Still, keeping rates higher for longer was the “right choice,” Griffin said in a separate interview Monday with CNBC.

Griffin, who has a net worth of more than $37 billion according to the Bloomberg Billionaires Index, founded the hedge fund Citadel in 1990. He later established Citadel Securities LLC, the trading firm that serves asset managers, banks, broker-dealers, hedge funds, government agencies and public pension programs.

Speaking to CNBC on Monday, Griffin also lambasted US regulators’ efforts to tighten rules for investment firms, contending the proposed regulations may make it harder for active managers to succeed. Hedge funds help make US capital markets more efficient, he said.

When it comes to the Federal Trade Commission’s new ban on non-compete agreements, Griffin said the rule could hurt firms.

“For us, it’s about protecting trade secrets,” he said.

He pointed to Jane Street Group’s claims that two of its former traders stole a valuable proprietary trading strategy when they went to work for competitor Millennium Management. Without a non-compete, the firm risks losing those trade secrets forever and the money spent to build them, Griffin said.

–With assistance from Katherine Burton.

(Updates with quote in second paragraph and additional context throughout.)

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