Ken Griffin Sounds Alarm on Trump’s Fed Pressure, Warning of Inflation Risk
Ken Griffin Sounds Alarm on Trump’s Fed Pressure, Warning of Inflation Risk
New York — Billionaire hedge fund CEO Ken Griffin has publicly voiced strong concerns over President Donald Trump’s ongoing criticism of the Federal Reserve, warning that such attacks threaten to ignite higher inflation and long-term interest rates.
In a recent op-ed for The Wall Street Journal titled “Trump’s risky game with the Fed,” co-authored with Chicago Booth Business School professor Anil Kashyap, Griffin asserted that the President’s strategy of publicly pressuring the central bank and suggesting the dismissal of governors carries “steep costs.” The duo drew parallels to the Nixon-era interference with the Fed in the 1970s, which historically contributed to the Great Stagflation crisis.
Griffin, CEO of Citadel, emphasized the potential for tens of millions of retired Americans to see their savings diminish if the Fed is perceived as bowing to political pressure, allowing inflation to rise unchecked. Such an outcome, they argue, could significantly impact the administration in future elections as senior voters grapple with the cost of living.
Responding to the criticism, White House spokesperson Kush Desai stated, “The Federal Reserve’s stated objective is to set monetary policy based on what the data show – and the data clearly show that the Trump administration’s policies have swiftly tamed Joe Biden’s inflation crisis.” Desai added that both the President and financial markets believe the Fed should respond by cutting rates to provide relief to American families and stimulate economic growth.
Despite the White House’s claims of tamed inflation, official statistics suggest a different trend. Forecasters anticipate the upcoming consumer price index will reveal a 2.9% year-over-year increase in August, up from 2.7% in July.
Griffin’s intervention represents a rare public rebuke from a major CEO, particularly given his past support for Trump in last November’s election. The op-ed underscores two primary dangers: artificially low rates potentially overheating the economy and exacerbating inflation, and investors losing confidence in the Fed’s commitment to price stability, leading to higher long-term borrowing costs for both the government and homebuyers.
The authors concluded that the President’s “best interest” lies in maintaining a truly independent Federal Reserve, capable of making necessary, albeit unpopular, decisions to safeguard economic stability.
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