Ken Griffin, founder and CEO of Citadel, the world's largest hedge fund, said on Tuesday that the Federal Reserve should act slowly in reducing interest rates to avoid having to reverse monetary policy in the future.
He said, "In my opinion, suspending interest rate hikes and then quickly shifting towards rate cuts would be the most destructive action. So I think they will be slower than people expect."
Federal Reserve Chairman Jerome Powell stated last week that the Federal Reserve is approaching the confidence needed to begin interest rate cuts. He said, "We are waiting to become more confident, and the inflation rate will continue to remain at 2%. When we gain this confidence - we are not far from this confidence - we should start relaxing restrictions."
According to the latest data released by the US Department of Labor on Tuesday, the US base inflation rate has exceeded expectations for the second consecutive month due to rising gasoline and housing costs, strengthening the Federal Reserve's cautious attitude towards interest rate cuts.
Coincidentally, Jamie Dimon, CEO of JPMorgan Chase, also believes that the Federal Reserve should wait before lowering interest rates. He believes that the COVID-19 pandemic has distorted economic indicators, and he is "dubious" about these indicators. He said that the Federal Reserve should wait until the situation becomes clearer before lowering interest rates.
"They can always quickly and dramatically lower interest rates. Their credibility is a bit precarious here," he said. "At present, the unemployment rate in the United States is very low, and wages continue to rise."
Trump will win
In addition, regarding one of the most important events in the market this year - the US election, Griffin believes that former President Donald Trump will win the election, but he refuses to disclose whether he will support Trump. He said that the previous tariff policy of the former president was "regrettable", but overall, the Trump administration will benefit the capital markets.
"I am very dissatisfied with the policies of this administration (the Biden administration). I want to hear what Trump will do for the United States. I want to see what his policy agenda is like," he added.
Participate in bank rescue operations
In addition, according to reports, Citadel participated in the rescue of the New York Community Bank at an appropriate price this month. In the $1 billion transaction led by former Finance Minister Mnuchin's Liberty Strategic Capital, Citadel Global in the Griffin hedge fund empire was one of the investors.
According to the Bloomberg Billionaires Index, Griffin's net assets exceed $37 billion and he founded the hedge fund Citadel in 1990. He later founded the trading company Citadel Securities LLC, providing services to asset management companies, banks, brokerage and trading firms, hedge funds, government agencies, and public pension plans.