Billionaire investor Ken Griffin publicly criticized President Donald Trump's pressure on the Federal Reserve and the administration's recent dismissal of the head of the Bureau of Labor Statistics, warning that the actions threaten U.S. economic credibility and could raise borrowing costs for Americans.
In an opinion piece co‑authored with University of Chicago economist Anil K. Kashyap in the Wall Street Journal, Griffin said the president's public criticism of Fed Chair Jerome Powell and suggestions that governors be dismissed have "steep costs," including higher inflation expectations, wider market risk premiums and weakened investor confidence in U.S. institutions. He wrote that those developments could lead markets to demand higher interest rates on long‑term debt, increasing borrowing costs for families, businesses and the federal government.
Griffin and Kashyap said the removal last month of Dr. Erika McEntarfer as head of the Bureau of Labor Statistics has damaged the credibility of official economic data. They argued that credibility in economic policy — built over decades, they wrote — can be lost quickly if processes and institutional independence are disregarded, and that loss would make stabilizing inflation more difficult and more costly.
"In a worst‑case scenario, if the Fed visibly bows to political pressure and permits inflation to rise unchecked, tens of millions of retired Americans will see their savings diminished," the pair wrote. Griffin also urged the administration to cut government spending and focus on policies to promote economic growth, saying fiscal discipline would help preserve confidence in U.S. finances.
Wall Street has traditionally guarded the Fed's independence, which affects mortgage, credit‑card and other loan rates. Most prominent financial figures have remained publicly muted about the president's interventions, Reuters and other outlets have reported, a reticence Griffin attributed to fear of retribution.
Federal Reserve officials have said they will set policy based on economic conditions, not political pressure. Powell recently indicated that, while inflation remains above the Fed's 2 percent target, a rate cut is likely at the next meeting. Markets, reacting to a weaker August jobs report that showed hiring slowed dramatically, are pricing in at least a quarter‑point reduction and possibly a half‑point cut.
Griffin, founder of the hedge fund Citadel and a major donor to Republican causes, has previously voiced reservations about White House fiscal proposals. He warned in June that a recent high‑profile spending bill — described by its supporters as a major legislative achievement — would add "several trillion dollars" to the national debt and that the legislation lacked sufficient measures to address long‑term fiscal challenges. The national debt has surpassed $37 trillion.
Analysts say a loss of institutional credibility can raise the cost of borrowing by increasing the premium investors demand for holding U.S. debt. Higher long‑term borrowing costs would affect federal interest expenses and translate into higher rates for consumers, potentially slowing investment and growth.
The spat highlights tensions between the White House and institutions long regarded as independent pillars of economic policy. The White House has defended its approach as seeking better outcomes for working Americans. The administration has argued that public scrutiny of policy and personnel decisions is appropriate when it believes existing institutions are not delivering as intended.
Griffin's break with the president is notable because the investor has been a prominent GOP donor and a fixture in Republican fundraising circles. His public critique underscores the anxiety among some market participants about political interventions that could reshape expectations about inflation, interest rates and the fidelity of economic data.
Policymakers and market participants will be watching the Fed's next meeting and forthcoming economic reports for signs of whether monetary policy will shift soon and how markets digest the competing signals from political leaders and central bankers.