Citadels Griffin says the Fed needs more consistency to tame inflation

NEW YORK (Reuters) – Billionaire investor Ken Griffin, the founder of Citadel and Citadel Securities, said on Tuesday the Federal Reserve needs more consistency of communication in order to tame inflation and that the setup for a recession is unfolding.

“If I could tell one thing to the (Fed) chairman, I would tell him to say less. I would just write a message: were going to put the inflation genie back in the bottle,” Griffin said in a televised interview with Bloomberg.

Earlier on Tuesday, Fed chair Jerome Powell said the Fed will likely need to raise interest rates more than expected to control inflation. Previously, some market participants have at some points read Fed officials speeches as less hawkish.

“I really believe consistency of messaging is so important because part of how the Fed gets the job done is the perception of the American public that they can get the job done,” Griffin said. He believes the Fed will increase interest rates to around 5.5% to tame inflation.

Still, the billionaire said the setup for a recession is unfolding, as late this year or next year the “pandemic orgy” of spending will come to an end.

Griffin expressed some concerns about the impact of a long debate about the debt ceiling until a final deal is made, but said common ground will be reached. “I do think itll be market volatility that will drive that compromise.”

He said Citadel is currently negotiating an enterprise-wide license to use artificial intellengence tool ChatGPT to help its developers write better code, translate software between languages and analyze information.

(Reporting by Carolina Mandl, in New York; Editing by Lincoln Feast)