Ken Griffin: Cost Of Capital Going Up Is "Heartbreaking"
Following are excerpts from the unofficial transcript of a CNBC exclusive interview with Citadel CEO Ken Griffin on CNBC’s “Closing Bell: Overtime” (M-F, 4PM-5PM ET) today, Wednesday, May 7.
Citadel's Ken Griffin: Tariffs are 'painfully regressive tax', hit working Americans hardest
Griffin On Stagflation
SARA EISEN: So, the topic du jour is the Federal Reserve. Fed Chair Jay Powell came out today. I don't think he leaned one way or another, but did warn that the tariffs present risks to higher inflation and also higher unemployment. What should the Fed be doing now?
KEN GRIFFIN: Well, actually, let's think about what he just said, presents risks to higher inflation and higher unemployment. The word that evokes is stagflation.
EISEN: That's a dirty word.
GRIFFIN: It's a dirty word. And I give him credit for not using that word because it's such a dangerous word. But Jay Powell is doing his best to keep all of his options open to make sure we can try to maintain maximum employment in the United States while mitigating the risk of an acceleration in inflation.
Griffin On Tariff Impact
GRIFFIN: And the question will be, if we implement tariffs at the rates that have been proposed, that will certainly be an inflationary shock. Will that shock persist as we undergo deglobalization and move supply chains back towards the United States? That's the real question that none of us know the answer to.
Griffin On Inflation
GRIFFIN: I'm, of course I'm worried about inflation. I mean, the reason the American voters elected President Trump was because of the failed economic policies of Joe Biden and the inflationary shock that reduced the real incomes of every American household. So, the president really does have to focus on managing inflation, because I think it's front and center the primary scorecard that American voters are going to think about when it comes to this midterm election.
Griffin On Wall Street Versus Main Street
GRIFFIN: I think this debate's been misframed as Wall Street versus Main Street. It's one country. And almost 65 percent of all Americans own stocks. So I start with my conversation on tariffs with the fact that all Americans are going to pay with respect to this trade war. But when it comes to finance, clearly, there's been a pullback by foreign investors from U.S. equities, U.S. debt securities, and the U.S. dollar. We, that raises the cost of capital for American businesses. That actually makes it harder to build factories. That makes it harder to invest in our country. That's really heartbreaking.
