Citadel CEO warns US retirees may pay ‘steep’ price for Trump’s Fed attacks. How to protect your nest egg

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Ken Griffin, billionaire laminitis and CEO of hedge money Citadel, is 1 of the Republican Party’s apical donors. Yet his latest critique of U.S. President Donald Trump is strikingly sharp.

In a Wall Street Journal op-ed successful the fall, Griffin blasted Trump’s attacks connected the Federal Reserve and warned of the economical fallout specified unit could bring (1).

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“The president’s strategy of publically criticizing the Fed, suggesting the dismissal of governors and pressuring the cardinal slope to follow a much permissive stance toward ostentation carries steep costs,” Griffin wrote with Anil Kashyap, an economics prof astatine the University of Chicago.

The Fed, tasked with maximizing employment and keeping prices stable, precocious lowered its benchmark complaint by 25 ground points and signaled 2 much cuts this year. Still, it noted, “Inflation has moved up and remains somewhat elevated (2).”

Griffin argued it is successful Trump’s “best interest” to fto the Fed enactment independently truthful it tin marque the pugnacious decisions needed to tame inflation. Undermining that independence, helium warned, risks terrible economical harm — and could wounded the GOP politically.

“In a worst-case scenario, if the Fed visibly bows to governmental unit and permits ostentation to emergence unchecked, tens of millions of retired Americans volition spot their savings diminished,” helium wrote.

“Senior voters — bushed of bearing the brunt of ostentation — could outgo the medication dearly successful the midterms.”

In spite of this critique, Griffin was 1 of the Wall Street moguls contiguous astatine a backstage meal hosted by the President connected Nov. 11 for the country’s fiscal leaders. It’s unclear if the Citadel CEO was capable to code his concerns straight with Trump.

Other fiscal experts are besides informing of the dire consequences of interfering with Fed autonomy. Economists are voicing concerns that White House interference could pb to dangerously debased involvement rates, tanking economical growth. This could effect successful skyrocketing inflation, important losses successful the banal market, and overmuch higher involvement rates successful the agelong term. President of the European Central Bank Christine Lagarde has besides warned that Trump’s attacks connected the Fed’s independency are a “very superior danger” to the planetary system (3).