Ken Griffin, Castle on CNBC's Delivery Alpha, September 28, 2022.
Scott Milin | CNBC
Ken Griffin, founder and CEO of Citadel, believes the Fed should move slowly to lower interest rates in its battle against stubborn inflation.
“If I were like them, I wouldn't want to cut too quickly,” Griffin said at the International Futures Industry Conference in Boca Raton, Florida, on Tuesday. “The worst thing they could end up doing is to cut, pause and then change direction back to higher interest rates quickly. That would be, in my opinion, the most destructive course of action they could take.”
“So I think they will be a little slower than people expected two months ago in cutting interest rates. I think we are seeing that,” he added.
His comment came as data showed inflation rising again in February, with the CPI rising slightly higher than expected year-on-year. Rising price pressures may keep the Fed on track to wait until at least the summer before starting to cut interest rates.
The billionaire investor said there are significant inflationary forces keeping prices high.
“We still have a tremendous amount of government spending. That's pro-inflationary. We're also going through a period in the history of deglobalization. So we have two big tailwinds that continue to support the inflation narrative,” Griffin said.
While the inflation rate is still far from its mid-2022 peak, it is still well above the Fed's 2% target. Fed officials have indicated in recent weeks that interest rates are likely to be cut at some point this year, and have expressed caution about stopping too early in the battle against rising rates.
The Federal Reserve's next two-day monetary policy meeting is scheduled to take place within a week.
Citadel's flagship Wellington multi-strategy fund is up 15.3% last year.
