Citadel founder Ken Griffin stated that Republican policies on tariffs and immigration are contributing to rising inflation, though he noted that deregulation—a key GOP priority—could eventually help curb price pressures.

In an interview at a Paris conference on Tuesday, Griffin remarked, "Republicans are struggling with the reality that many of their campaign policies—such as banning illegal immigration into the U.S.—are actually inflationary." He explained, "When you cut off illegal immigration, you shrink the available labor pool, which is inflationary."

However, Griffin added that deregulation "should lead to productivity gains over time, which would help lower inflation."

Last week, Federal Reserve officials cut interest rates for the third consecutive meeting but signaled that further reductions are not guaranteed. Some policymakers remain concerned about inflation staying above the Fed’s 2% target, while others are more focused on a slowing labor market.

Griffin also highlighted a divergence between bond and stock market reactions to inflation and deregulation. "The bond market is signaling anxiety about inflation," he said. "You have to seriously consider: At what interest rate are you willing to lend money to the U.S. government, given its staggering fiscal deficits and very loose monetary policy amid current inflationary pressures?"

He argued that long-term borrowing for future capital formation and U.S. investments "is effectively being undermined by the Fed’s current accommodative policy." On the other hand, he noted, the stock market "loves the easy-money narrative." Griffin observed, "You’re seeing two very different investor groups"—bond investors anxious about deregulation and rising inflation, while equity investors "thrive in this environment."

Griffin declined to endorse a successor for Fed Chair Jerome Powell, whose term ends next year, but stressed the importance of maintaining distance between the White House and the central bank.

In the wide-ranging interview, Griffin also urged Europe to address long-standing structural issues, including its shallow capital markets. "There’s no question the Western world needs a more successful Europe," he said. "We need higher economic growth, more innovation, and greater demand for consumer goods and services in Europe, because only when Europe is strong and prosperous will the Western world be strong and prosperous."