For Citadel CEO Ken Griffin, the political implications of still-elevated inflation are not lost on him.<\/p>\n
Inflation has come down a lot from 9% in 2022 to 2.9% in the government\u2019s latest CPI report<\/a>. Core PCE prices, the Fed\u2019s favorite gauge of inflation, rose 2.9%<\/a> in August, matching July\u2019s climb.\u00a0<\/p>\n But inflation has been sticky as tariffs take hold, and Griffin predicted inflation will continue to be in the mid-2% to 3% range next year, still above the Fed\u2019s 2% target.<\/p>\n \u201cThe American voters have been exhausted of inflation,\u201d he told CNBC on Thursday<\/a>.<\/p>\n In 2024, the high cost of living was a focal point in Trump\u2019s reelection campaign, and Biden-era inflation hurt Democrats. They lost the White House and Congress, while Trump won all seven swing states<\/a>.<\/p>\n Many voters blamed Democratic policies\u2014including stimulus spending\u2014for sustained, high costs, exit polls<\/a> found.<\/p>\n \u201cThere\u2019s no doubt that the president and the Republicans came to power on the back of frustration with inflation,\u201d Griffin said. \u201cI would not underestimate how grating a 3% inflation rate could be to tens of millions of American households.\u201d<\/p>\n Inflation could feature heavily in midterm elections next year, as the Republican Party looks to defend narrow majorities in the House and Senate. And voters are souring on Trump\u2019s economy.<\/p>\n A recent Reuters\/Ipsos poll<\/a> showed only 28% of respondents approved of Trump\u2019s handling of their cost of living. A YouGov\/Economist poll<\/a> put Trump\u2019s approval rating on the economy at an all-time low of 35%.<\/p>\n One indicator of affordability has been a thorn in Trump\u2019s side: high mortgage rates<\/a>. Yet as Trump looks to the Fed for homeowner relief, many worry about political influence over the independent body.<\/p>\n Trump has been criticized lately for pressuring the Federal Reserve and threatening its independence. Critics argue that his efforts to appoint loyalists<\/a> to the Fed, public calls to lower interest rates, and attempts to remove a sitting governor represent a clear move to sway monetary policy for political purposes.\u00a0<\/p>\n Griffin advised that continued Fed independence would be in Trump\u2019s interest.<\/p>\n \u201cIf I were the president, I would let the Fed do their job,\u201d he said. \u201cI would let the Fed have as much perceived and real independence as possible, because the Fed often has to make choices that are pretty painful to make.\u201d<\/p>\n