Citadel Founder Issues Stinging Rebuke of Trump's Federal Reserve Campaign
Citadel founder Ken Griffin has delivered one of the most significant condemnations from the US business community regarding Donald Trump's ongoing assault on the Federal Reserve, warning that the President's actions represent a serious political misstep that could jeopardise his party's position.
Griffin Warns of Political Consequences at Davos Forum
Speaking at the World Economic Forum in Davos, the billionaire hedge fund manager cautioned that unless Trump creates "more distance" from the central bank, he risks becoming associated with potentially unpopular decisions to control inflation. Griffin emphasised that such association could prove politically damaging, potentially unleashing inflationary pressures similar to those that contributed to Democratic losses in the previous presidential election.
"You want to have a level of distance from the Fed if you're the President in my opinion," Griffin told assembled delegates. "Because you want the Fed to do the tough job of controlling inflation when need be, even when that causes a rise in unemployment and causes real pain for American households."
Unprecedented Legal Action Against Central Bank
The criticism comes amid an extraordinary legal confrontation between the Trump administration and America's central banking institution. Earlier this month, it emerged that Trump's Department of Justice was investigating the Federal Reserve over cost overruns related to renovations at its Washington headquarters.
Federal Reserve Chair Jay Powell, who himself became subject to investigation, revealed this action through an unprecedented video statement in which he accused the President of waging war against the central bank's approach to monetary policy. This statement triggered substantial backlash from various quarters of the financial and political establishment.
Widespread Institutional Support for Federal Reserve
The response to Trump's campaign against the Fed has been notably unified among former central banking officials:
- Every living former Federal Reserve chair issued a joint response alongside several ex-Treasury secretaries
- They condemned the administration's actions as reminiscent of "how monetary policy is made in emerging markets with weak institutions"
- Powell's fellow central bank chiefs from other nations also intervened, expressing "full solidarity" with the Federal Reserve
Despite this institutional support, much of America's business community had remained relatively quiet about Trump's campaign until Griffin's remarks at Davos.
Trump's Sustained Criticism of Monetary Policy
Over several months, the President has maintained regular criticism of the Federal Reserve's cautious approach to lowering interest rates, frequently branding its chair "Jay 'too late' Powell" and calling for his resignation. The assault has extended to legal action against Fed governor Lisa Cook, with US prosecutors pursuing charges related to a legacy property transaction.
Griffin connected this criticism directly to core electoral issues: "Immigration and inflation were two issues that really drove voters... in the election. How do you control inflation? Inflation is controlled by the Fed making a politically unpopular decision to raise rates when need be, to slow or cool the economy."
The Citadel founder concluded with a stark warning: "The easy money policies that I think Trump is trying to encourage the Fed to pursue, increases the risk of inflation, and I think puts both he and his party in a more precarious position."
