Citadel CEO: "White House Should Maintain Distance from Fed"... Stresses Political Independence

Concerns Over Fed's Political Independence
Criticism of Potential Appointment of Trump Ally
Likelihood of Kevin Hassett's Appointment Declines
JPMorgan Chase CEO: "Kevin Warsh Is More Suitable"

Ken Griffin, CEO of the major US hedge fund Citadel, stated that President Donald Trump should "maintain distance" from the Federal Reserve (Fed).

According to the Financial Times (FT) on December 16 (local time), Griffin made these remarks at an event in Paris, France, in response to a question about whether Kevin Hassett, Chairman of the White House Council of Economic Advisers, should be appointed as the next Fed Chair. Griffin said, "The most important step the President and the next Chair can take is to maintain distance between the White House and the Fed."

This statement is interpreted as reflecting concerns on Wall Street that President Trump may appoint a close associate as the next Fed Chair. Hassett, a close ally of Trump, is considered the leading candidate. However, his chances of being appointed have recently declined significantly.

Investors are worried that, due to his close relationship, Hassett may find it difficult to resist President Trump's pressure to lower interest rates and may be limited in his ability to contain inflation. In this scenario, long-term bond yields could rise, which would be the opposite of President Trump's desired low-interest-rate environment. As anxiety among investors grows, President Trump has also adopted a more cautious stance.

Hassett has repeatedly emphasized that the key interest rate should be determined independently of political pressure. However, in a recent interview with CNBC, he stated, "If President Trump has good ideas regarding economic policy, I will communicate them to the Fed's rate-setting committee," and added, "The President is a seasoned expert who has observed the economy for a long time." These comments have sparked controversy.

Reflecting this, Jamie Dimon, CEO of JPMorgan Chase, indicated last week that Kevin Warsh, former Federal Reserve Governor who served as a bridge between the Fed and Wall Street during the financial crisis, would be more suitable as the next Chair.

However, CEO Griffin clarified that he is not endorsing any particular candidate. He said, "Expressing my opinion would not help in the selection of the next Chair," and added, "I hope the President chooses someone who can reassure global financial markets, US investors, and consumers that the United States can manage inflation."

Meanwhile, CEO Griffin is well-known for supporting Republican presidential candidates. However, he withheld official support for President Trump in last year's election and has also publicly criticized Trump's reciprocal tariff policies.