Ken Griffin Warns Fed Could Hike Rates as Inflation Nowcast Climbs to 3.74%
Updated
Updated · The Motley Fool · May 7
Ken Griffin Warns Fed Could Hike Rates as Inflation Nowcast Climbs to 3.74%
4 articles · Updated · The Motley Fool · May 7
May 5 remarks from Citadel founder Ken Griffin put Fed rate hikes back in play, saying inflation remains above target and labor-market weakness seen a few months ago has largely faded.
A Cleveland Fed nowcast cited in the report projects trailing inflation rising from 2.4% in February to 3.56% in April and 3.74% in May, reinforcing the view that 2026 rate cuts are effectively off the table.
That shift matters because U.S. stocks are already richly valued: the Dow topped 50,000 earlier this year while the S&P 500 and Nasdaq have hit record highs in an AI-driven rally.
The report ties the inflation pressure to Trump's tariffs and to the Iran conflict, which it says disrupted about 20% of global crude supply through the Strait of Hormuz and could keep energy-driven price pressures elevated for quarters.
As real-world inflation bites, is the AI-driven stock market rally living on borrowed time?
Can the new Fed Chair fight historic oil shocks without triggering a market crash and recession?
What is the true driver of today's inflation: government tariffs or the global oil crisis?
Inflation at 3.8% and No Fed Rate Cuts in 2026: How Geopolitics and Energy Shocks Are Reshaping the U.S. Economy
Overview
In May 2026, Ken Griffin raised urgent concerns about the U.S. economic outlook, highlighting how persistent inflation—previously linked to Biden-era policies—and ongoing global conflicts are shaping Federal Reserve policy expectations. As consumer sentiment drops to near-recessionary levels and unemployment remains steady, the market faces uncertainty over the Fed’s next moves. Incoming Chair Kevin Warsh is expected to struggle in building consensus that inflation risks are easing, making it harder for the Fed to adopt a dovish stance. This complex environment signals a challenging period ahead for both policymakers and investors.