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Citadel's Griffin expects US economic landscape to be challenging, more favorable for fixed income

Published 04/01/2024, 03:23 PM
Updated 04/01/2024, 03:28 PM
© Reuters. FILE PHOTO: Kenneth Griffin, Founder and CEO of Citadel, takes part in the panel discussion "Lessons From the Great Recession: How Businesses Survived and Now Look to Thrive" at the 2011 The Milken Institute Global Conference in Beverly Hills, California

By Carolina Mandl

NEW YORK (Reuters) - Citadel's hedge fund billionaire Kenneth Griffin told investors he expects the medium-term economic landscape will remain challenging, but more favorable for fixed-income markets in the U.S., as inflation eases, according to a letter seen by Reuters.

"Economic growth is likely to be modest, staying below potential in the upcoming quarters, with the (U.S.) central bank persisting in its fight against inflationary pressures," he wrote, adding that consumers will continue to experience real income growth.

Griffin, who controls the $59 billion hedge fund Citadel Advisors and the market maker Citadel Securities, reiterated in the letter his concerns about the U.S. fiscal situation, saying it cannot be overlooked.

"It is irresponsible for the U.S. government to incur a deficit of 6.4% when unemployment is hovering around 3.75%," he added.

© Reuters. FILE PHOTO: Kenneth Griffin, Founder and CEO of Citadel, takes part in the panel discussion

The U.S federal budget deficit grew by 13% in February from a year earlier on interest costs and tax refunds. For the first five months of the fiscal year, the deficit rose by $106 billion, or 15%, to $828 billion, as interest costs on the national debt rose.

Last year, the hedge fund posted a 15.3% gain for its flagship Wellington fund, outperforming multi-strategy competitors.

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