WASHINGTON: Citadel founder Ken Griffin says the Federal Reserve (Fed) will be able to ease off monetary tightening if inflation drops to 4% by year-end.

       That “will give the Fed much more latitude in policy,” Griffin said in a wide-ranging interview with Bloomberg’s Erik Schatzker at the Milken Global Conference in Beverly Hills.

       But if it remains near or above the current 8.5%, the central bank “will have to hit the brakes pretty hard,” tipping the economy into recession.

       The billionaire also highlighted the big disconnect in the labour market, noting there are twice as many job openings than unemployed people seeking work.

       That will put even more upward pressure on wages, further exacerbating inflation, he said.

       That the economy isn’t pulling more people off the sidelines of the job market is a “real problem,” he said.

       Griffin, 53, also said cryptocurrencies are the “great hot spot” of debate within his Chicago-based firm, noting that most employees who are younger than he are big believers in digital assets.

       “They believe that cryptocurrency has an important role in the global economy as a means of facilitating payment,” said Griffin, who has previously expressed skepticism about the value of digital tokens.

       “These are really sharp people,” he added. “I have to live with the reality that an asset is worth what people perceive it to be worth.”

       A major campaign contributor to Republicans, Griffin also weighed in Florida’s recently enacted Don’t Say Gay law and governor Ron DeSantis’s move to restrict Walt Disney Co’s special tax status in the state. — Bloomberg