Hedge fund founder Ken Griffin warned Thursday that inflation could persist for decades, citing U.S. government spending.
Griffin, the founder of Citadel, warned that the high U.S. budget deficits were unsustainable while at the Bloomberg New Economy Forum in Singapore, according to the New York Post. The federal budget deficit hit roughly $1.7 trillion for fiscal year 2023, according to an Oct. 21 release from the Treasury Department. (RELATED: Rand Paul Warns Of Potential ‘Disaster’ For Taxpayers If Spending Bills Pass)
Griffin said the U.S. government failed to plan for inflation when it “went on the spending spree that created a $33 trillion deficit,” the Post reported.
NEW YORK, NY – NOVEMBER 12: Founder and CEO at Citadel LLC Kenneth C. Griffin participate in a discussion at the New York Times 2013 DealBook Conference in New York at the New York Times Building on November 12, 2013 in New York City. (Photo by Larry Busacca/Getty Images for The New York Times)
The Consumer Price Index (CPI) rose by 3.7% on a year-to-year basis in August despite 11 interest-rate hikes since March 2022.
“We are likely to see higher real rates and we’re likely to see higher nominal rates,” Griffin said during his remarks, according to Bloomberg.
The budget deficit would have been over $300 billion higher had the Supreme Court not struck down President Joe Biden’s plan to forgive up to $20,000 in student debt on constitutional grounds in June.
Federal Reserve Chairman Jerome Powell said that inflation would be transitory during an August 2021 speech at Jackson Hole, Wyoming, then admitted in September 2021 that inflation ended up lasting longer than he “expected.”
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