CEO & Founder, Citadel
Citadel CEO Ken Griffin at Semafor World Economy
Citadel is a sponsor of Semafor World Economy. Ken Griffin made his comments in an unsponsored editorial interview.
About Ken Griffin
Ken Griffin, founder and CEO of Citadel, has spoken at multiple conferences in early 2026, addressing the U.S. national debt, fiscal policy, the war in Iran, and the impact of artificial intelligence. At the WSJ Invest Live conference in February, Griffin said the U.S. is "late in an economic cycle" and expressed concern that the country is "losing the fiscal space to engage in counter-cyclical spending," adding that the government should be running a near break-even budget at this point in the cycle. He also criticized policy uncertainty, stating that if "the rules of the road are going to change every couple months, I'm best off making no decision." Regarding the war in Iran, Griffin said at the Milken Global Conference and in subsequent interviews that the closure of the Strait of Hormuz could drive the world into a recession, though he argued the U.S. would be "largely shielded" due to its energy independence. He praised the president's efforts to curtail Iran's nuclear ambitions, calling a nuclear-free Middle East "really important" to global security. On AI, Griffin described a "step change function in the productivity of the AI toolkit" in recent months, noting that work previously done by people with advanced degrees in finance over weeks or months is now being completed by AI agents in hours or days. He said this development left him "depressed" when he witnessed its impact within his own firm. However, he also cautioned that machine learning models are not well-suited for investing, which requires understanding future events rather than patterns in historical data. Griffin also discussed the importance of education, stating that "roughly a quarter of American graduates from high school are proficient in math" and that fixing the K-12 system is "a battle for the very soul of our country." He reiterated his view that higher productivity is the path to prosperity, achieved through deregulation, R&D investment, and education.
Transcript (33 segments)
I
Interviewer0:00
Ken, thanks so much for joining us on the Semafor stage again. We're grateful Ken is a partner, but this is going to be an editorial session and a lot to get to given our state of the world. So Ken, I wanted to just start off with where we are in the global economy just given all the volatility we've seen since the attacks in Iran, a lot of nervousness around the world, I'm sure among people in this room as well. How are you seeing this play out especially for Citadel which is such a major player in the commodities markets?
K
Ken Griffin0:44
So the war in Iran is obviously one of the greatest geopolitical events of our lifetime and the president has made the decision to pursue the objective of a nuclear-free Iran which I think is an incredibly worthy objective. I applaud the president for trying to create a lasting peace in the Middle East because clearly if Iran was able to build a nuclear weapon, we would see nuclear weapons across the entire region and I think that could have dire consequences for the safety and well-being of the world. Having said that, we are now in the midst of an energy crisis. Everyone in this room knows that with the straits being closed that the world's supply of oil has been severely curtailed and for that matter the world's supply of natural gas has been curtailed and so we have a classic energy price shock unfolding across the world as we speak that of course will create demand destruction. It will cause economies across the world to decelerate. The risk of a recession has increased and central banks are making some really difficult decisions. Is the inflationary spike that this will create, will they view those as transitory and leave monetary policy as is or will they view themselves as having to raise rates to try to keep inflation expectations well anchored. So this really is a very, very treacherous moment for the world economy as we navigate the consequences of trying to secure a lasting peace in the Middle East.
I
Interviewer2:19
Well, we heard at least some of us Treasury Secretary Scott Bessent say last night that this Iran situation is the epitome of a transitory situation when it comes to inflationary pressures. But we've seen as particularly in Asian markets, the ramifications of what's happened in that region. Do you see the longer term effects even if let's say the ceasefire and these talks that are unfolding actually lead to some progress?
K
Ken Griffin2:54
Well, so the key is the progress will be measured by the reopening of the straits from a geopolitical perspective. Obviously, the agenda of a nuclear-free Iran is one issue, but from a macroeconomic perspective around the world. From that lens, the key criteria is the resumption of the continued flow of energy products from the Middle East without tolls, without harassment. That's the key issue for the world's financial markets. And I think that here in the United States, we are somewhat sheltered from the worst of this because of America's focus on energy independence. I mean, thankfully, the development of fracking, the robust use of a variety of fuel sources in America means that our economy is actually much more sheltered from the consequences of this energy shock than, for example, most of the Asian economies or for that matter Europe. You know, Europe shut down one of their last great natural gas producing fields just a few years ago before the war or as the war with Russia and Ukraine unfolded. So Europe is now beholden more than ever to the United States, to the Middle East for energy. Countries like Germany, like Italy are going to face the brunt of this crisis in a much more profound way than the American people are.
I
Interviewer4:16
So what is at stake for the global economy if safe passage through the strait is not guaranteed and if it remains shut down for all intents and purposes?
K
Ken Griffin4:32
I mean let's assume it's shut down for the next 6 to 12 months. The world's going to end up in a recession. There's no way to avoid that. We'll see a rapid shift towards alternative fuel sources. We'll see wind. We'll see nuclear. We'll see solar, we'll see huge pushes to reduce dependencies on fossil fuels, but that's measured in years, not months. So, we are going to see an acceleration of some of the historical trends that have played out over the last 10 years as the world rapidly tries to move away from fossil fuels if we lose that very dependable source of fuel being the Middle East.
I
Interviewer5:11
Yeah. And how has it been for you running Citadel in this very volatile period where the situation is just changing so rapidly. Have you just had some bare knuckle moments the last few months?
K
Ken Griffin5:27
You know, I've got an extraordinary team and having said this, this has been an extraordinary period of time. So you really have seen markets go through quite a bit of chaos and it's been unnerving on many days for all my colleagues and for myself. But this is what we're paid to do. We're paid to try to navigate scenarios like this. We're paid to assimilate and process information. We're paid to make the best possible decision that we can make. I think what has caught most of the world's financial players flatfooted has been the grit and the perseverance of the Iranian people. The Iranian military is still very much intact. The population is still very much under the control of the current regime. And the fact that Iran has continued to be able to demonstrate its resiliency under a massive attack by the US is really quite remarkable. And to be clear, the US military has achieved virtually every single achievable objective that you can from the air. I mean, this is by no means a criticism of the US military. The US military has absolutely delivered. We have effectively destroyed every single target that you can strike from the sky. It's much more a statement about the resiliency, perseverance, and grit of the Iranian military and the Iranian people.
I
Interviewer6:48
Yeah. And all the drones and everything that they're launching against the region, the missiles they still have in reserve, the mobile launchers, and the fact that they had put in place a very well thought through plan and how to distribute decision-making under attack. So I think what is of note is that if we had waited several years to do what we're doing today, the consequences I think would actually be far more dire.
K
Ken Griffin7:16
So, for example, there's a reasoned belief that the Iranian strike on the Qatari LNG fields was done by a missile that is able to change trajectory on impact. Missiles of that nature can evade the Iron Dome. Now, Iran can only produce a very small number of these missiles today, but if they were able to produce a significant quantity of these missiles, all of Israel would be subject to attacks of unimaginable consequences. And that would only be a few years down the road. Imagine Tel Aviv being struck multiple times by high impact, high radius of destruction weapons. It would be of profound consequences to the Western world.
I
Interviewer8:06
Yeah. So despite what we're seeing today, if it had happened later, it could actually be much worse.
K
Ken Griffin8:13
It could have been far worse. And that's one of the problems you have in leadership as the president of the United States is that the counterfactual will never be known. Right? He had made a very difficult decision about what to do right here, right now. The history has been forever changed. No one would ever know what the counterfactual would have been if he had not moved now or for that matter had struck their nuclear weapons production facilities last year. You know, it's well established within the defense space that the Iranians were going ever deeper in where they were located both the weapons production systems and the centrifuges. We were quickly moving beyond the ability for the United States to actually strike them with any efficacy whatsoever. Like literally months away from the point where the Iranians would be able to continue the pursuit of nuclear weapons with no fear of attack by the United States.
I
Interviewer9:07
So timing really mattered.
K
Ken Griffin9:08
Timing really matters.
I
Interviewer9:10
Yeah. So I wanted to talk about your time here last year. I think for a lot of people who came to our event last year who watched online heard you talk about the American brand, you know, having been hurt, the idea of America being hurt in terms of its image around the world when you're talking about presidential leadership and some of the decisions that have been made in the last few months. Where do you see the American brand today? Has it been further tarnished because our allies are questioning our resolve, our dependency, or do you see it's in a sort of a status quo state?
K
Ken Griffin10:01
Look, I think it's a brand that there's been both good and bad that has happened to the American brand over the course of the last 12 months. You know, for example, on the good side, look at what happened in Venezuela. Venezuela was unquestionably like a planet in orbit around China. And we went to bed one night and that planet changed solar systems. It went from the Chinese solar system to the US solar system overnight with no loss of American lives and very little loss of Venezuelan lives. It was one of the most remarkable regime changes in the history of the world and the Trump administration pulled that off with incredible grace. Now having said that, I think that probably created undue confidence that we could effectuate the same change in Iran and I think we did a very poor job of messaging to the world the moral imperative for what has happened in Iran over the course of the last 50 days. We did not position this issue with the world through the right talking points and nor did we bring our allies on board with us and I think that was a mistake. I think this is one that we really should have worked with the Europeans much more aggressively to create a united front for the cause of peace in the Middle East and the cause of peace in the world. I mean, we have long taken for granted that we are in a world where you don't have to worry about the consequences of nuclear war. But when I was growing up in school, we had the drills where you'd go underneath the desk and duck in the event of a potential strike by the Russians on the United States with a nuclear weapon. Those memories are lost to the current generation of young people in America. And I think the president being of the age he is has an appreciation for just how important it is to live in a world where we do not have a massive proliferation of nuclear weapons into the hands of countries that are sworn enemies of our country.
I
Interviewer11:57
And what do you think about also messaging to the American people because there's so much angst about where gas prices are despite America's production of energy resources ourselves. Consumer sentiment is at an all-time low, despite the labor market still being fairly resilient. What should the American people be told about where we're at, why we're doing this?
K
Ken Griffin12:28
Look, affordability, which is a wonderful rebranding of the dynamics of inflation from the Biden administration, is really an issue that haunts the American household. You know, we went through that period of extreme inflation through the Biden administration that diminished the purchasing power of the American household. And in particular, if you were a retiree and had a traditional portfolio with a substantial bond allocation, you lost a meaningful part of the purchasing power of your savings. Savings that you spent 45 years of your life accumulating. No one wants to live under the fear of inflation and that period of material, substantial, sustained inflation under the Biden administration. The Trump administration and economic forces were bringing that down. But every time you see a price spike, it just sort of puts you back into a state of fear that are we going to relive that diminuation of purchasing power that we lived through during the Biden administration. So I think that's a real issue. Against that, unemployment continues to be low, which is good for the American household, but then the change coming from AI leaves everybody anxious. What do I make of my future earnings prospects when I keep reading the newspaper that AI is going to take my job away? So it's a very stressful period for the American worker. You have to worry about inflation, you need to worry about the changes that are going to ensue from AI. This is a moment in time where people just feel a lot of stress when it comes to the economy.
I
Interviewer14:04
So, one of the bodies here in Washington that is supposed to manage these issues is the Federal Reserve. We're waiting for hearings for the next Fed chair nominee, Kevin Warsh, and where that goes once he's in place, if he's confirmed. What do you think the Fed should do in this kind of situation? We've already seen a lot more debate than we normally see on the Federal Open Market Committee. Where do you think if he becomes Fed chair Warsh should take the board and how to manage this economy?
K
Ken Griffin14:49
Look, the US Federal Reserve has a very clear dual mandate: unemployment and inflation and where we set interest rate policy is intended to balance the tension intrinsic between the labor market and the strength of the labor market and how hot inflation is running. And I do believe that the president has made a great choice with Kevin to be the future Fed chair. I mean, he is well-versed in the underlying economic theory. I think he will make very thoughtful and independent decisions on behalf of the American people.
I
Interviewer15:23
And remember, really independent because there's been others who have been names thrown around including Kevin who's I think changed his views a bit about inflation and what the role of the Fed. You believe he will be independent? I think you'd share that belief, would you not?
K
Ken Griffin15:43
I actually do because I've known Kevin for a while and I believe in the Fed as an institution is stronger than sort of political winds, but the political winds are pretty strong.
I
Interviewer15:59
I mean, you know, there's no doubt that this White House has been far more willing to jawbone the Fed than other recent administrations have been. I've written on the topic. I actually don't agree with that as a matter of policy. I think the Fed chair job is a hard enough job to do without the president sort of coming in over the top because to be clear when you've got to break the back of inflation you have to cost American employees their jobs. There's nothing that I could imagine to be more painful than to vote to cause people to lose their jobs. But if that's what's required to put the inflation genie back in the bottle, that's what needs to happen. So, I think it's a job that when we politicize the job, we make it a far more difficult job for the Fed chair. And at the same time, I think there's something to be said when the administration's able to say wasn't our decision. It was made independently by the Fed that we needed to raise rates. Yes, Americans lost their jobs, but that's what was required to put inflation back into check. Like that independence of the Fed serves both the interests of the body politic and the interest in the long run of the American people.
So it's for the greater good.
K
Ken Griffin17:12
It's for the greater good. It's like preventive medicine. No one likes to go to the doctor every year, but we all do because we want to live longer and better lives.
I
Interviewer17:21
Yeah. Well, and I wanted in terms of longer, better lives, you said recently in an interview, you talked about, you know, life after Citadel and giving back to the country, opening the door to, you know, possible government service. How are you seeing that in this kind of polarized environment that would still attract you where we've seen, you know, all manner of people come from Wall Street and become Treasury Secretary, have other jobs and then this town is not an easy place to do business, if you will.
K
Ken Griffin17:58
So first of all, American business shouldn't happen in Washington. American business should happen where American businesses are located. San Francisco, in Illinois, in New York, in Texas, in Florida, Mississippi, in Alabama, and the 50 states of the United States that defined our great republic. American business should not happen in the halls of Washington. Washington should be here to support the vibrancy and success of American business with thoughtful regulatory policies and a willingness to keep their hands off American business. We don't want to be a nation of crony capitalism. Let's look at your question from a different vantage point. As CEO of Citadel, I place great emphasis on my colleagues being civically engaged. I think it's really important that people have rich lives both in and outside of work. We have 300 colleagues at Citadel who serve on the board of nonprofit organizations. This gives them firsthand appreciation of the problems and challenges that are faced in American society. I think that makes them far better leaders at work, far more thoughtful citizens. We also actively encourage all of our colleagues to be involved in politics. Some of my colleagues are amongst the most active Democrat supporters in the United States. It's well known that I'm an active Republican supporter. When you actually tell people to be involved in politics, you know what happens? They don't have childish debates on policy. They have thoughtful discussions and debates. We need more of that in Washington. We need less polarization and we need more thoughtfulness. And I really think that one of the things that American businesses do poorly when they discourage people from being involved in politics, they actually in some sense force the conversation into the land of the underground. And in that land you see the worst of people. When you let people embrace the fact that they want to be politically engaged and active, you actually, I think, bring people's best characteristics out and you get much more thoughtful debates and dialogue.
I
Interviewer20:02
Well, speaking of debates and dialogues in our last moment, I want to ask you going back to your comments last year about the American brand. You said it at a time when frankly not that many CEOs were talking publicly about the effects of the administration, the effects of what's happening in this town. Why speak out? Because there's been sort of a fear of, you know, retribution, which we've definitely seen from the administration. Your Citadel is regulated by the SEC. You know, what retribution stories do you really have?
K
Ken Griffin20:42
Well, I think tweets is normally... I mean, I need to say it, a tweet does not hurt me that much. I mean, to be blunt, I kind of frame them and put them on the wall. They're badges of honor.
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Interviewer20:55
They're kind of badges. Like if the president cares about what you say, you're doing okay. And to be clear, not retribution on you, but others.
K
Ken Griffin21:03
No, but I mean, in all seriousness, if the president cares about what you have to say, that means your message is getting out. And I do think whether it's a Republican or Democratic leader in the White House, you want the leadership of the American people to listen to the leaders in American business. You know, the leaders in American business create the jobs. They create the tax base. They create the innovation. And all of us who are in American business have a responsibility to use our voices in our areas of expertise to help advance the interests of our country. And when it comes to retribution, I'll tell you the retribution I faced under the Obama administration was far more painful than a tweet. Whether it was the IRS coming in endlessly year after year with no audit findings but just harassment. Whether it was MF Global that we had bailed out in 2007 not receiving TARP because it would benefit a hedge fund controlled by a Republican money manager. That's retribution. I haven't faced retribution under this administration. I faced it under the Obama administration. That's the difference. People are afraid of Trump because to be blunt, he's a bit too bombastic for his own good often. But when it's all said and done, I don't have any stories of retribution from my friends in business, from this administration.
I
Interviewer22:24
Well, Ken, thank you so much for using your voice here.
K
Ken Griffin22:27
Great to be here.