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Sept. 29, 2022, 8:13 a.m. EDT

Citadel’s Ken Griffin says inflation may have already peaked, though recession risk still looms

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By Mike Murphy

Ken Griffin, the billionaire founder and chief executive of the hedge fund Citadel, thinks the U.S. may have already hit peak inflation, though a recession is still possible.

Speaking Wednesday at CNBC’s Delivering Alpha conference, Griffin had a somewhat positive outlook in an interview with CNBC host Scott Wapner.

“The U.S. equity market, although down quite a bit for the year, is showing a level of resiliency,” Griffin said, according to a CNBC transcript . “And the U.S. economy, most importantly, is still strong for people who are going to work every day.  In fact, I think we’re looking at real wage growth in Q4 this year.

“We’re probably looking at peak inflation having just occurred or just about to occur.  So the forward trajectory on a number of key fronts looks somewhat better domestically, again, assuming nothing goes totally off the rails abroad,” he added. “Right now, the American consumer is feeling pretty good about where things stand on an absolute basis.” 

While less bearish than billionaire investor Stanley Druckenmiller , who also spoke at the conference and predicted a “hard landing” for the economy and a recession by the end of 2023, Griffin said he’s still “very focused on the possibility of a recession.”

“Well, everybody likes to forecast recessions, and there will be one, it’s just a question of when and, frankly, how hard,” he said. “And is it possible that end of ’23 we have a hard landing?  Absolutely.”

Griffin also noted that the Fed is facing an incredibly difficult task with “a limited toolkit” in trying to rein in inflation that’s at 40-year-highs while not sending the economy crashing down.

“It’s a tough job,” he said, adding that the Fed lost some credibility over the summer and is now trying to regain that by acting more decisively.

“That’s the really difficult dance they’re trying to do right now…  You raise rates today, it impacts very small sectors of the economy very sharply.  The follow-on knock-on effects will take 6-12 months to play out.  It’s a really difficult job they have,” Griffin said.

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