Citadel’s Ken Griffin warns of a recession in America, though many would be quick to state the nation is already in one.
Bank of America and Wells Fargo were one of the first to warn people in Q4 of last year.
Ken Griffin’s hedge fund Citadel was amongst the very few who turned in profits last year when majority of the industry lost $208 Billion for clients.
This marked the biggest single-year decline since 2008, when they lost $565 billion, LCH data showed.
Citadel’s gain of $16 billion last year was the largest annual gain ever made by a hedge fund manager, LCH said.
Retail investors grow weary of the hedge funds gains, comparing Ken Griffin to Bernie Madoff, who also never posted losses despite the industry crashing.
“The game is not fair and it never has been. Individual investors, even when operating in a swarm, are destined to lose. How do I know? I helped design the game,” says ex-Citadel Data Scientist Patrick McConlogue.
But Ken Griffin says he sees a setup for a US recession primarily due to people’s savings accounts being tarnished.
Here’s what the Citadel CEO had to say.
Ken Griffin Sees Setup for a US Recession
(Bloomberg) Ken Griffin said the setup for a US recession is unfolding, with the Federal Reserve needing to raise interest rates further after Americans were stung with “traumatic” levels of inflation.
The founder of Citadel and Citadel Securities said the Fed is limited in how much it can fight inflation with interest-rate increases, likening the tool to “having surgery with a dull knife.”
“We have the setup for a recession unfolding,” he said in an interview with Bloomberg in Palm Beach, Florida.
Ken Griffin said he would advise Powell to say “less” on inflation.
“Every time they take the foot off the brake, or the market perceives they’re taking their foot off the brake, and the job’s not done, they make their work even harder.”
Ken predicted in 2020 that US markets would struggle with rampant inflation.
He said his firm is not far away from current market consensus on price growth.
“Americans are burning through their pandemic savings, and soaring interest rates are threatening the housing market and other parts of the economy.
That’s a recipe for a downturn, Ken Griffin told Bloomberg.”
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