Citadel’s billionaire founder, Ken Griffin, said he is skeptical that a recession can be avoided in North America next year and said now is not a time to change course on monetary policy.
“To take the foot off the brake right now and not finish the job, I think it’s the absolute worst mistake that the Fed could possibly make,” Griffin said at the Bloomberg New Economy Forum in Singapore.
While Griffin said his team believes recession can be averted next year, “I am finding it a bit hard to believe we are not going to have a recession at that point of time, sometime in the middle to back half of 2023,” he said.
In September, the hedge fund manager warned at a conference in New York that there will be a recession in the US saying it is “just a question of when.” The Federal Reserve earlier this month raised rates by 75 basis points for the fourth time in a row, with Chair Jerome Powell opening a new phase in his campaign to regain control of inflation, saying US interest rates will go higher than earlier projected, but the path may soon involve smaller hikes.
In North America, “we are highly confident we are going to finish this year on a modest growth note,” said Griffin, who runs hedge fund and market making businesses. “The issue of course is 2023 when the lagged effect of the Fed having increased rates will really start to grind on the economy.”
The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
--With assistance from Lulu Yilun Chen.
This article was provided by Bloomberg News.