Ken Griffin, the billionaire founder and chief executive of hedge fund Citadel, believes the US may already have peaked in inflation, although a recession is still a possibility.
Speaking at CNBC’s Delivering Alpha conference on Wednesday, Griffin offered a somewhat positive outlook in an interview with CNBC host Scott Wapner.
“Although the US stock market is down quite a bit for the year, it’s showing a degree of resilience,” Griffin said a CNBC transcript. “And the US economy in particular is still strong for people going to work every day. In fact, I think we’re looking at real wage growth in Q4 this year.
“ “We are likely to see peak inflation that has just occurred or is about to occur.” ”
“We probably expect inflation to have peaked or is about to. So progress on a number of important fronts looks a little better domestically, provided nothing goes haywire abroad,” he added. “Right now, the American consumer is feeling pretty good about the absolute state of things.”
Though less pessimistic than billionaire Stanley Druckenmiller, who also spoke at the conference and predicted a “hard landing” for the economy and a recession by late 2023, Griffin said he was still “very focused on the possibility of a recession.”
“Well everyone likes to forecast recessions and there will be one, it’s just a matter of when and frankly how hard,” he said. “And is it possible that we have a hard landing at the end of 23? Absolutely.”
Griffin also noted that the Fed, with “a limited toolkit,” faces an incredibly difficult task in trying to contain inflation at a 40-year high without crashing the economy.
“It’s a tough job,” he said, adding that the Fed lost some credibility over the summer and is now trying to regain it by taking more decisive action.
“That’s the really difficult dance they’re trying to do right now… If you hike rates today, it’s going to have a very big impact on very small sectors of the economy. The after effects will take 6-12 months to unfold. It’s a really tough job that they have,” Griffin said.
https://www.marketwatch.com/story/citadels-ken-griffin-says-inflation-may-have-already-peaked-though-recession-risk-still-looms-11664422436?rss=1&siteid=rss Citadel’s Ken Griffin says inflation may have already peaked, although the risk of a recession still looms