Citadel founder Ken Griffin has warned that elements of the Republican policy agenda, including tougher immigration controls and tariffs, are contributing to inflationary pressures in the US, even as deregulation could ultimately help bring prices down, according to a report by Bloomberg.
Speaking at a conference in Paris, Griffin said that policies aimed at curbing illegal immigration reduce the size of the available workforce, which in turn pushes wages and prices higher. “When you end illegal immigration, you reduce the size of the available workforce — that is pro-inflationary,” he said.
However, Griffin argued that a push towards deregulation could offset those pressures over time by boosting productivity and economic efficiency, helping to moderate inflation in the longer term.
He also pointed to a growing divergence between bond and equity markets in their response to inflation and monetary policy. According to Griffin, bond investors are increasingly uneasy about inflation risks, particularly against the backdrop of large US fiscal deficits and what he described as relatively easy monetary policy. By contrast, equity markets have continued to benefit from abundant liquidity, with stock investors more comfortable operating in an environment of low interest rates.
Griffin added that loose monetary policy risks undermining long-term capital formation in the US by distorting the cost of debt-funded investment. He declined to comment on potential successors to Federal Reserve chair Jerome Powell but stressed the importance of maintaining the central bank’s independence from political influence.
Beyond the US, Griffin urged Europe to address structural weaknesses, including shallow capital markets and slow growth, arguing that a stronger Europe is essential to the prosperity of the wider Western economy. His remarks echo calls from other global banking executives for European policymakers to streamline regulation and foster innovation.
Griffin also reiterated his cautious stance on artificial intelligence, suggesting that generative AI’s impact on productivity and the wider economy may be more limited than many expect, at least in its current form.
