Renowned investor and founder of hedge-fund giant Citadel, Ken Griffin, recently expressed his concern over rising inflation. Speaking to Bloomberg on Tuesday, Griffin emphasized the need for the Federal Reserve to take decisive action to rein in inflation.
According to Griffin, inflation has become a persistent issue and could continue for years due to structural changes driving the world toward de-globalization. He warned that if the Fed fails to act promptly, it risks compromising its commitment to maintaining a 2% inflation target.
Notably, Griffin also shared his prediction of an upcoming recession in the second quarter. However, he stated that the severity of the recession would hinge on various factors. Despite this, Griffin did not anticipate any further interest rate hikes from the Fed, nor did he expect Congress to cut spending in the lead-up to the 2024 elections.
In response to recent data showing subdued inflation in October, Treasury yields experienced a significant drop. This news spurred a surge in stock prices, with the Dow Jones Industrial Average surging by over 580 points (1.7%). Likewise, the S&P 500 rose by 2.2% and the Nasdaq Composite jumped by 2.6%.
These developments have led many investors to anticipate rate cuts by the Fed in 2024.
Key Highlights:
- Ken Griffin emphasizes the need for the Federal Reserve to address rising inflation.
- Structural changes driving de-globalization could cause long-term inflation.
- Griffin predicts a recession in the second quarter with severity influenced by various factors.
- Treasury yields drop sharply, leading to a surge in stock prices.
- Expectations of rate cuts for 2024 are on the rise.