Ken Griffin, founder of Citadel hedge fund, has expressed concern over the swift contraction of the market and the deterioration of the U.S.’s global financial standing, attributing these issues to the ongoing trade war.
What Happened: Griffin, who is at the helm of the $65 billion hedge fund Citadel LLC, voiced his apprehensions about the current market conditions at the Semafor’s World Economic Summit on Wednesday. He indicated that the market is shrinking too rapidly to generate substantial returns, stating, “There are no great opportunities,” reported Business Insider.
Griffin also underscored the adverse effects of the trade war on the U.S.’s image as a global financial safe haven. He cautioned that the country’s brand is in jeopardy, asserting, “We’re eroding that brand right now.” He further lambasted the government’s trade policies, characterizing them as having “devolved into a nonsensical place.”
The billionaire called on the administration, including President Donald Trump, Treasury Secretary Scott Bessent, and Commerce Secretary Howard Lutnick, to act judiciously, reported Fortune. “When you have a brand, you need to behave in a way that respects that brand,” he counseled.
Griffin contextualized the recent economic chaos instigated by the White House in terms of consumers who purchase a product because they trust the brand. “On the financial markets, no brand can compare to the brand of the U.S. Treasuries…we put that brand at risk,” he said.
Against the backdrop of existing uncertainty, Griffin told investors, “All you’re trying to do is tread water and not drown.” The Miami-based hedge-fund founder, a Trump voter and a GOP megadonor, also urged business leaders to engage “calmly, [respectfully,] and collectively” with the President, the House of Representatives, and the Senate about these policies.
Why It Matters: Griffin’s comments come amid the impact of President Trump’s sweeping tariffs announced on April 2, which triggered a market downturn. These policies have caused turmoil in global equity and bond markets, depreciated the U.S. dollar against other currencies, and led investors to turn to safe-haven assets like gold.
Although Trump later eased some measures with a 90-day pause on specific tariffs, a 10% tariff on most global imports and a 25% tariff on imported cars and some auto parts remain in effect. On Tuesday, Trump also softened his stance on tariffs on China in anticipation of a trade deal.
Griffin, a notable backer of Trump, is among a number of affluent individuals who have expressed doubts about the reasoning and execution of the recent tariffs. Even Tesla (NASDAQ:TSLA) CEO Elon Musk stated in the company’s Q1 earnings call that ‘lower tariffs’ are good for ‘prosperity’, but leaves the ultimate decision to the U.S. President.
Citadel largely avoided market turmoil, with its flagship fund down just 0.9% in Q1, compared to the S&P 500's decline of over 4%.
Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) declined 7.7% over the past month while SPDR S&P 500 ETF Trust (NYSE:SPY) fell 6.7% during the same period.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.