The Federal Reserve has raised rates from near-zero to over 5% since early 2022 to curb inflation. While this policy has been successful in reducing price pressures from 40-year highs, inflation remains above the Fed's target at 3.7% annually. Griffin predicts that the impact of these hikes will soon start to affect the job market and the economy at large.
Key takeaways:
- Billionaire hedge-fund manager Ken Griffin is unsure if the stock market rally can continue, citing concerns over the impact of the Fed's interest rate rises.
- Indices including the S&P 500 and Nasdaq 100 have surged about 17% and 41% respectively this year, fueled by an AI tech boom and hopes the Federal Reserve may soon stop raising interest rates.
- Griffin noted that it typically takes two years for borrowing cost increases to filter through the economy, and he believes the impact of these hikes will soon start to play out.
- The Fed has raised rates from near-zero levels to upwards of 5% since early 2022 to cool inflation, but inflation remains above the Fed's target at 3.7% annually.