Ken Griffin is the founder and CEO of Citadel. He was speaking at a conference in Florida. Griffen is worried the Fed cuts too soon and too fast:
- “If I’m them, I don’t want to cut too quickly,”
- “The worst thing they could end up doing is cutting, pausing and then changing direction back towards higher rates quickly. That would, in my opinion, be the most devastating course of action that they could pursue.”
- “So I think they are going to be a bit slower than what people were expecting two months ago in cutting rates. I think we are seeing that play out”
On Tuesday in the US we had data showing inflation accelerating:
- US February core CPI 3.8% y/y versus 3.7% y/y expected
- US dollar is all over the place after a hot CPI reading
- The breadth of US inflation pressure narrowed - RBC
- CIBC: Analyzing the implications of February's US CPI report for the Fed
Griffin sees sound reasons for sticky high inflation:
- “We still have an enormous amount of government spending. That’s pro inflationary. And we are also going to a period in history of deglobalization. So we’ve got two big, big tailwinds that continue to support the inflation narrative,”
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June is the current consensus and market forecast for the first rate cut. If there is another hot report like Tuesday's I';d be backing July instead.
Griffin