Ken Griffin Cautious About Economy: 'I'm A Bit Anxious We're Sort Of In The 7th Or 8th Inning Of This Rally'

Hedge fund manager Ken Griffin is known for his takes on the economy and recent fears that a recession could happen.

Here’s how Griffin saw things standing now and where they could go.

Griffin on Economy: Griffin said he was anxious about the current stock market rally. Griffin, who is the founder of hedge fund Citadel LLC and the owner of money market company Citadel Securities, joined CNBC Thursday to share his thoughts about the economy.

“It takes about a year to two years for an interest rate hike to work its way through the economy, it's not instantaneous,” Griffin said.

Griffin said the impact could be felt now with items such as the job market weakening, companies willing to pull back with pay on starting roles and signs consumers have had enough with price increases.

“There’s signs here that we’re heading very quickly into hopefully the soft landing, potentially a more difficult scenario.”

Griffin stopped short of saying a recession was coming but said his personal view was the U.S. economy was still enjoying stimulus from Washington D.C. and the shot of adrenaline to the economy was not sustainable.

“I’m a bit anxious that this rally can continue. I’d like to believe this rally has legs.”

The hedge fund manager said a portion of the rally is attributed to the rise of the frenzy of artificial intelligence and many technology stocks that saw increases in their share prices.

“I’m a bit anxious we’re sort of in the 7th or 8th inning of this rally.”

Related Link: Citadel's Ken Griffin Adds $83M Palm Beach Property In Florida Real Estate Portfolio Boost 

Griffin on Artificial Intelligence: Along with sharing his thoughts on the economy, Griffin was also asked about the rise of artificial intelligence.

“I believe that generative AI is going to have a very uneven impact across the economy,” Griffin said.

The hedge fund manager said places like call centers can eliminate the need for people and take care of repetitive tasks using generative AI.

Griffin also said the strike in Hollywood was a result of the impact of artificial intelligence being used for productivity.

At Citadel, Griffin said the company used AI for coding but hadn’t cut jobs due to productivity gains and recent hiring activity.

Griffin said some companies would have to reduce headcounts due to the productivity gains from artificial intelligence.

“Big picture though for most of the economy, this is another productivity tool that simply makes us better at our jobs.”

Griffin compared the rise of generative AI and productivity use cases to the same as Microsoft Corp MSFT launching items such as Microsoft Word and Microsoft Excel. These items helped increase productivity at workplaces and other areas.

SPY Price Action: Comments from Griffin slightly spooked the market with the SPDR S&P 500 ETF Trust SPY moving lower when his interview aired on CNBC.

The leading ETF has since recovered and is up 0.81% to $450.14 on Thursday at publication versus a 52-week trading range of $348.12 to $459.44.

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Photos: Griffin, photo by Paul Elledge via Wikimedia Commons; Shutterstock