For Ken Griffin, founder and CEO of Citadel, the world's largest hedge fund, the political implications of persistently elevated inflation cannot be ignored. The global hedge fund leader stated in an interview on Thursday (September 28) that "American voters are already overwhelmed by inflation."

Although US inflation has declined significantly from 9% in 2022 to 2.9% in the government's latest Consumer Price Index report, inflation has remained sticky due to tariff policies. The Federal Reserve's preferred inflation measure, the core Personal Consumption Expenditures price index, rose 2.9% in August, matching July's increase.

Griffin predicts that inflation will remain in the 2%-3% range next year, still above the Federal Reserve's 2% target.

**Inflation Concerns**

In 2024, high living costs became a focal point of Trump's re-election campaign. Polling at the time found that many voters blamed persistently high expenses on Democratic policies, including economic stimulus programs.

Griffin commented on this, stating: "There's no question that the President and Republicans were able to come to power because of growing public frustration with inflation. At the same time, I wouldn't underestimate the harm that 3% inflation causes to tens of millions of American families."

Inflation is expected to remain a significant issue in next year's midterm elections. Republicans are currently trying to maintain their slim majorities in the House and Senate, while voters are gradually losing confidence in Trump's economic policies.

A recent Reuters/Ipsos poll showed that only 28% of respondents approve of Trump's handling of their cost of living. Meanwhile, a YouGov/Economist poll indicated that Trump's economic approval rating hit a historic low of just 35%.

**Federal Reserve Independence**

Additionally, Trump has recently come under scrutiny for pressuring the Federal Reserve and threatening its independence. Critics argue that his attempts to appoint allies to the Fed, publicly calling for lower interest rates, and trying to remove current board members are clear manifestations of attempting to manipulate monetary policy for political purposes.

Griffin believes that maintaining Federal Reserve independence would benefit Trump. He noted: "If I were President, I would let the Fed do what they need to do. I would give the Fed as much 'perceived' and 'actual' independence as possible, because the Fed often needs to make some quite difficult decisions."

Earlier this month, the Federal Open Market Committee cut rates by 25 basis points to boost the weakening job market. In preceding months, the Trump administration had continuously pressured Federal Reserve Chairman Jerome Powell and other committee members to lower rates.

Griffin warned that weakening Fed independence could lead Americans to conflate the White House with the central bank: "If the President is seen as controlling the Fed, then what happens when those difficult decisions must be made?"