A Conversation with Ken Griffin, President and CEO of Citadel - WEF Annual Meeting 2026

Welcome, welcome to all of you here, and welcome to those of you on the livestream to this conversation with Ken Griffin, who is, I think, without doubt, one of the greatest investors of our era and one of the greatest entrepreneurs of our era. This is a man who, what, in the mid-1980s started trading in his dorm room at Harvard and in the decades since has built one of the biggest and best hedge funds in the world and biggest and best market makers in the world, so it's a pretty impressive achievement. But the reason I'm really excited to have this conversation is that Ken Griffin is one of the few people I know where I am sure that he will say what he thinks. And in this day and age, that's pretty rare.

So I hope you live up to that. That happens most times we have a conversation. I want to start, actually, with the here and now. Everyone here is talking about geopolitics, but I actually want to start in a completely different part of the world, which is Japan. Something big has been happening in Japan. The long bonds in Japan jumped dramatically in yields. I think the 40-year bond hit, JGB hit 4% for the first time yesterday. That was a pretty big jump. Is something important going on there? Is this a Liz Truss moment in Japan?

Like I said, she's going to start with a really tough question. So let's go back and talk about the Liz Truss moment to level set. Circa 2022, UK, the sense that the budget proposal from Liz Truss and her administration did not reflect the fiscal realities of the UK put the UK bond market literally into a state of chaos. And it required massive intervention by the UK central bank to bring both price stability to the marketplace and a sense of confidence that the UK market was open for investment. It was the first major loss of confidence in a sovereign bond market of a tier-one issuer in modern history. Japan, just 48 hours ago, appears to have had a Liz Truss lite moment. Liz Truss like or Liz Truss lite?

L-I-T-E. L-I-T-E. That's what the kids say. Yes. So if you look at what happened in Japan, it was one of the biggest moves in yields in this century. It does reflect a sense of apprehension by market participants that Japan's fiscal house is not in order. The thought that the government would be in a position to cut taxes, which, of course, increases the size of the government deficit, created a bit of a panic in the Japanese market. The reason it's worth emphasizing is it's the second time in recent years that a major bond market has gone into a state of chaos because of a sense of a lack of fiscal discipline. The bond vigilantes are back. And the big question is, when do they show their force in America?

The United States runs a deficit of close to 6% of GDP. Debt-to-GDP is approaching highs post-World War II. The United States is in a more fiscally precarious position than it has been in decades. And the risk of the bond vigilantes coming back into the marketplace and expressing their distaste for the profligate spending of the US government could come into play.

So why don't you answer your own question? When does that happen in America? Is America the country you're worried about next, or are there others that you're particularly concerned about?

So, big picture, the fiscal picture in countries like Japan or the UK or France, in many respects, more fragile than the United States. Smaller investor bases, not as universally owned debt in terms of global ownership. The United States has a very broad global ownership of its bond base. So we're more likely to see these events happening in countries outside the United States. But the difference is, if the United States bond market has an event like this, the financial implications for the world are far more devastating. If you think about the Japanese bond market, for example, virtually all the Japanese bonds are owned by Japanese households and Japanese domestic institutions, in contrast to the United States, where a substantial portion of all debt is held by sovereign wealth funds, international pension plans,

huge number of investors around the world outside of America.

And do you think market participants are underplaying that risk in the United States? Are we being too sanguine about it?

So I think there's an appreciation that household wealth in America is very deep. So we have the resources in the United States to service our debt for the foreseeable future. So there's a sense of tranquility, but I believe that might be misplaced. And my biggest concern is that the longer we continue to accumulate debt in America, in this moment of, let's call it, tranquility towards the numbers, when the inevitable correction happens, the far bigger that correction is likely to be.

So Secretary Bessent yesterday mentioned the fact that the deficit was lower, was coming down, and he argued that the US under the Trump administration was on track and that the revenue from the tariffs was helping and that spending was going to get under control. Do you agree that this administration is on the right fiscal track?

So this administration is very much pursuing an all-in pro-growth strategy, hoping that we can grow our way out of our current fiscal position. They started this experiment back in the first administration. We'll never know how that experiment was going to end because of the pandemic. So what's really frustrating from an economics perspective is Trump and team went for this playbook in the first administration, promising signs it was going to work. Then the pandemic happens. And with that came a surge in unemployment, of course, the concurrent hit in GDP, and a period of incredible government spending. Most people don't remember that we spent as much in the pandemic as a percent of GDP as we did to win World War II.

It's a lot. It's a lot. It's a staggering number. And of course, in one of those two events, we saved the free world. In the second of the two events, we warmed our couches. So the amount that we spent in the pandemic really put the United States in a much, much more precarious position fiscally, which makes the Trump bet that we can grow our way out of the situation a higher-stakes bet than it was back in the first administration.

So let's talk about the kind of ingredients of the overall Trump policy, because I think it's not just fiscal policy. There's a huge transformation going on in geopolitics. There's a huge transformation going on in economic policy. And at the same time, we're in the midst of this AI revolution. And all of those three are going to have a big impact together on where the US ends up. So let's Let's start with the economic policy changes. There's fiscal, as you said, huge change in trade policy. The US has become a tariffing country. It may not have been as higher tariffs as we expected on Liberation Day, but still 10% or higher effective rate tariffs, and the use of tariffs as a weapon, very clearly.

And the other big supply-side change has been a total clampdown on immigration. Are those two economic policies helping the US?

Well, let's first of all take a step back. I think there's two things that are important to keep in mind. Number one is Trump ran on these policies. And to his credit, unlike most politicians, he ran on a clear set of policies and he is delivering on those policies in his actions. So we may agree or disagree with the policies, but the American voters elected him and selected these policies when they cast that ballot. You know, I remember back when President Obama won, he ran on hope. And I was with a friend of mine, and I said, so what policies did he run on? And she's like, I don't know, hope. I said, okay, but hope for what? No answer. Trump ran on a very clear set of policies, and he's moving quickly to implement those policies.

Now, let's talk about those policies. Tariffs, a dream that will bring manufacturing back to America, a dream that will reduce our dependency on foreign nations for critical items, whether it's pharmaceutical products or other items that are of importance to national security. That policy has had some of its intended effects, but we have yet to bring manufacturing jobs back to the United States. And I think the biggest issue is no one's confident what the US tariff policy is going to be two years, four years, six years, eight years from now. And before you spend hundreds of millions of dollars or billions of dollars to build a manufacturing plant, you really want to believe that the policy that is the anchor of that decision

will be permanent in nature. And because the United States has such a long history of having low or no tariffs, I think people have a very hard time believing that the current tariff regime is going to persist. That's issue number one. I'm just tossing up on the balance sheet. It sounds like that's a negative. Personally, I think it's been a negative. I think that we have seen higher inflation due to the tariffs. We have disrupted longstanding trading relationships because of the tariffs. And we've obviously increased the amount of cronyism in America as corporate CEOs have lined up in Washington trying to argue why their business should be exempted from tariffs. And many have prevailed. So I think we've ended up in a pretty unfortunate position with the tariff policy.

But, again, the president ran on these policies and he implemented them.

How damaging will the immigration policy be for the economy? I know he ran on it, but how damaging will it be?

So it's a tale of two worlds. First of all, no country's borders should be open to mass immigration that is literally uncontrolled. And if you looked at the video footage or imagery of the southern border of the United States, over the Biden administration, it was just chaos. And the president, to his credit, did exactly what should have been done years ago. He secured the southern border of the United States of America. Now, the challenge with that is that the southern border of the United States of America was the source of a tremendous number of people who are willing to do tough, difficult jobs for relatively modest wages, whether it's picking the crops in California, cleaning dishes in restaurants, helping to build buildings and houses.

These are people who did a lot of very, very difficult work for very modest wages, which helped reduce the level of inflation in the United States. Losing that supply of labor over the years to come is gonna come with it higher prices for housing, higher prices for food in grocery stores. That's a negative. The bigger problem for the United States is we're potentially losing access to the best and brightest minds from around the world who have immigrated to America, who have created just a tremendous number of jobs in the United States on the back of their creativity and ambition. The majority of the AI startups are run by either immigrants or the children of immigrants. In fact, most of Silicon Valley, the majority of Silicon Valley is either run by immigrants or children of immigrants.

The immigrant population of the United States has been transformative to our economy because we are able to bring so many of the world's best and brightest to America. Not trying to take away from the UK, I was with the leadership of a major UK institution recently, major UK educational institution, and they spoke about all the great startups that were launched by the graduates of this institution in the UK. And then the ones that got traction? Go to the US. Move to America.

But that sounds like overall immigration policy is a net negative too. So now let's turn to what you call the crony capitalism. You warned in September about the risks of crony capitalism in the US. And since then, we've seen the administration take stakes in a company. We've seen the president push around CEOs. Is America now a crony capitalist country?

I think it's really hard to extrapolate 12 months of what we've seen into the statement that America is a crony capitalist country. In fact, most of the CEOs that I know find the idea of lobbying for favor in Washington to be quite distasteful. They want rules of the road. They want to understand the markets they're going to compete in. They want less regulation, and they want to get on with business. They don't want to be in Washington trying to curry favor because they know that that's mercurial in the long run.

They may find it distasteful, but they know that what they need to do is get the president's phone number. I am struck whenever I talk to U.S. CEOs, the single most important thing is, do they know the president and how can they talk to the president? This is, to me, a kind of exhibit A of a crony capitalist country.

So exhibit A of a crony capitalist country, though, is much uglier than this picture. Much uglier than this picture. This president... has come into office with an enormous amount of energy and an agenda to accomplish in four years. He's willing to break more glass, he's willing to step outside of traditional bounds of what the president would do, because he knows he has a very small amount of time to accomplish what he wants to accomplish. So I think you need to balance the sort of, in his mind, the race against the clock, trying to correct things that have gone wrong. And here's an important point: he has a willingness to listen to these CEOs, right? Everyone says, well, why won't people speak up about the president and the president's policies?

And at the same time, they're asking for his phone number. They know that President Trump will listen. They want to have a chance to advocate for their positions, perhaps too much behind closed doors. Perhaps they should be more outspoken in what their concerns are in the public forum, partially to keep the House and Senate informed as to what's important for American business. But President Trump, to his credit, he does listen to people.

That is definitely true. And certainly, and we'll come to the positives, because this is not just a list of negatives on the ledger. This is an administration very focused on helping business that it thinks is important and deregulating and removing barriers. But there's one more, two more negatives I want to talk about. Attacks on institutions. This is a presidency where if you are critical, you are punished. And if you don't do what the president does, you are punished. And let's take the attacks on the Federal Reserve, which are very, very obvious. Just a few days ago, Jerome Powell, chair of the Federal Reserve, announced that they were pausing interest rate hikes in response to the...

Blatant pressure, as Chair Powell made very clear in a very powerful video. How damaging is that onslaught against the Fed?

So I'm going to answer this slightly differently. What I don't understand is why does the president want to be so tightly associated with control of the Fed? Because often, the Fed has to make incredibly unpopular decisions from a political perspective.

But surely, because the president wants the Fed to make decisions that are popular from a political perspective, and then wants it to do what he wants.

Well, okay, so let's take a huge step back. Why was President Trump elected?

Due largely on counts of affordability and immigration.

Right. So I think that would be like universally agreed upon. Immigration and inflation were two issues that really drove voters last November in the elections—November, a year and change ago, of course. All right. How do you control inflation? Inflation is controlled by the Fed making a politically unpopular decision to raise rates when need be to slow or cool the economy. I mean, Volcker was hated as he was doing this decades ago, and now he is revered. But you want to have a level of distance from the Fed if you're the president, in my opinion, because you want the Fed to do the tough job of controlling inflation when need be, even when that causes a rise in unemployment and causes real pain for American households. The easy money policies that Trump is trying to encourage the Fed to pursue

increases the risk of inflation and, I think, puts both he and his party in a more precarious position.

And does the actual act of putting pressure on the Fed itself cause problems because you are seeing an independent institution being politicized?

So clearly, to the extent that you're seen as putting political pressure on an independent institution, you're making yourself own both the good and the bad that goes with that institution. And if I were the president, I would just look to create more distance. "Have you said that to him?" I've made this clear to members of his administration. I've not made that specific statement to him directly, but I have certainly made that clear to members of the administration.

Let's talk about geopolitics, which is obviously obsessing everybody here in Davos. The question of Ukraine is the question of the moment. What is the president trying to achieve? And how would you characterize American foreign policy right now? I mean, people talk about America first. Is it America unconstrained? What is the sort of way you characterize it? And is it good for America's economy?

There's a lot in that question. There's a lot in that question. All right, so let's take a huge step back. I mean, first and foremost, in contrast to the prior administration, this is a president who has a very active foreign policy agenda. And frankly, I do think that Trump portrays an America that's strong. We may have been in a very different place in Europe if Trump had been president. I dare say, would we have a war in Ukraine if Trump had been president four years ago? Because he certainly projects a very different America than we saw with the Biden administration. His first big pivot, obviously, is to make sure that North, Central, and South America are not under the control of any other country in the world.

He's trying to solidify America's footprint in our hemisphere, and I think that there is, amongst the American people, for sure, support for that policy. Now, the big wild card is, where does this put the United States vis-a-vis China? Because today, today, the geopolitical landscape is really the story of two superpowers, China and the United States, both vying for their position in what is a rapidly evolving new world order. And clearly, the United States, we have frayed our relationship with our European allies in ways that I don't understand or appreciate. But there is a push here to get Europe to step up, both to be in a position to be more militarily capable. And what is not said, but what should be said, is that Europe needs to grow its economy more quickly.

A wealthier West is a more powerful West, and we need to see Europe really embrace a radically different set of policies. Go back and pull out Mario Draghi's report and implement it.

I don't think anybody in this room would disagree with that, or indeed watching, absolutely.

But the problem is, is you need to do it. But I'm not sure that... You need to do it.

I'm not sure that implementing Mario Draghi's report is really front of mind for President Trump right now when he's thinking about... Should be front of mind in Europe's mind.

As a response to overt threats on Greenland? I mean, you know, there is a, there is a kind of— So, you know, what I can't understand is why are we fighting over a piece of rock covered by ice?

Whoa, whoa, whoa. That's not what it's about. This is about is, you know, America, an ally of Europe, is, you know, demanding to buy or threatening to take the sovereign territory of another country. That's what this is about. This is about values. This is about what countries can and cannot do.

It's about bullying. So what do you actually think is happening here?

What do I actually think is happening here? I am waiting to hear President Trump this afternoon. I have no idea what he's going to say.

All right. Guess what? That makes two of us. Because when it's all said and done, the United States has access to put military bases in Greenland as it sees fit. It doesn't need it. So we don't need Greenland.

This is about his name on the map. This is about history. Alaska Purchase, Louisiana Purchase, Trumpland Purchase.

So we speculate. And like you said, we'll hear more this afternoon.

But if you were a European, how would you handle this?

I think that facial expression said it all, didn't it? I mean, again, like, what are we fighting about here?

That's a very good question. Let's turn to some positive.

What are we fighting about here? And I think that when... when our Secretary of Treasury, in some sense, says to everybody, "Cool down," I think he represents the reality that, at the end of the day, this is an undertaking that's important to the President for reasons that we maybe don't fully understand. But at the end of the day, this is not going to be the straw that breaks the camel's back.

But just to be clear, by "cool down," do you mean acquiesce?

No, I think it means take a step back. I mean, one thing to keep in mind, okay, is President Trump, his whole life, has been a real estate developer. Keep going. All right? That's a tough business. You ever buy a house? Yeah. Okay, how painful is that process? Very. All right? Like, inspect the home, you find a bunch of problems, and now you're in this really convoluted, tortured negotiation. It's crazy land. Okay, and at the end of the day, project's done, you shake hands, and you're all happy about it. But he comes from a world that's very transactional in nature, where your counterparty is often very difficult, and then the minute you close, life just moves on.

I think that's a great analogy, except for the fact that the people who are living in the house do not want to be purchased.

I like that.

That's good. Let's turn to some positives. We have very little time left. I do want to get your take on AI, because we've been through areas where one could argue that the policy mix in the United States is not helpful for long-term U.S. growth. But on the other side of the ledger is the deregulation that is going on, and there is this extraordinary revolution in AI. So one question, how real is the deregulation? How much is this administration doing to really strengthen the U.S. economy on that side?

So first and foremost, the end of the regulatory onslaught is in and of itself an extraordinary boost to American business. You cannot imagine how painful it was each and every day under the Biden administration to look at what new crazy proposal was being put into place to solve a problem that didn't even exist. I mean, our constant friction at Citadel with the government across umpteen different aspects of our business was exhausting. And to have that literally end on one day, Election Day, just gives you so much energy as an entrepreneur to go back and build your damn business. So the biggest sea change I've seen across American executives has been just like the giant sigh of relief. I can now go and focus on building my business.

And that prior administration, we happen to be a creditor of Spirit. Their merger with JetBlue was stopped. Spirit's in bankruptcy today. There were so many decisions that were so poorly thought out in terms of economic consequences, it cost the U.S. economy dearly. I cannot emphasize that enough. And so the Trump administration is making slow progress on deregulation thus far, but the end of the regulatory onslaught has been just an extraordinary boon for American business.

And I hear that a lot, and that's a very clear positive. What about AI, where we've seen a huge, huge amount of hype, clearly a transformational technology? Is it behind the productivity improvements we're seeing? And how quickly is it going to be transformational for U.S. business?

Look, I think that AI is actually somewhat different in terms of its impact on the productivity story the last two years than you might think. Everyone's enamored with large language models. Like, 'write a poem,' it writes a poem. It's like crazy. 'Go write an essay in XYZ,' it writes that essay. I mean, it's unbelievable that a computer can generate what appears to be interesting, intellectually insightful text, like at the touch of a few keystrokes. What AI has done is it has re-empowered the head of technology in every business in the United States. And it has pushed budgetary resources into the hands of the chief technology officer. So what you're seeing across American business is actually the impact of American businesses spending more on digitization writ large, of which AI is just one component.

It's one component, but in some sense, it's the cover story that creates the space for American companies to really embrace technology in a much more profound way. I was in China about a year and a half ago with a group of prominent global executives, and they were all talking about how AI was changing their business. It was so fun. And I said, 'Let's go around the table and let's each share a story as to how we're using AI to make our business better.' I heard five or six great stories. Not one involved generative AI.

But does that mean that the productivity boost from generative AI is still to come? How quickly will it come and how big will it be? I mean, are you in the camp that, you know, as Dario Amodei says, you know, half of all entry-level white-collar jobs will, you know, be gone in the next five years? Is it that kind of change or is it more incremental?

Look, you know, put yourself in his shoes. How much money does the AI community need to raise over the next five years? A lot. Right? Data center spend in the United States this year, over half a trillion dollars, like over $500 billion, okay? You're not gonna generate this kind of spend unless you're gonna make a promise you're gonna profoundly change the world.

So is it hype? Of course.

AI will not profoundly change the world. Of course, like how else are you gonna get people to write $500 billion of checks just this year alone? There needs to be a level of 'AI is your savior,' almost. And the question is, where will AI land in productivity gains at the end of the day? In certain areas, we know it's going to be profound, whether it's call centers, whether it's helping to improve the productivity of software engineers. But in a number of white-collar jobs, there was a recent Harvard paper on this. They called it AI work slop—that it looks good, but if you sort of peel back the onion, the substance isn't there. I was with one of my colleagues who runs our commodities business, and he handed me a report that we were generating with an AI engine.

Doesn't matter what the topic was, the first few sentences, like, 'Wow, that's really insightful.' And then you go down below that, and it's all garbage.

So that's going to—and we are running out of time—but that suggests that AI is not going to come to the rescue to make up for the various negatives that we discussed about in the first part of this conversation. So, in 10 seconds...

So, but remember, the spending on technology writ large is having a clear positive impact on the economy.

So which economy in the world benefits most from this confluence of geopolitics, economic policy, and technology change?

I mean, but who benefits the most? That's a really interesting way to put it. In 10 seconds? In 10 seconds. You know, when all is said and done, it's somewhat ironic, but the United States and China are the two big beneficiaries of this moment.

We could continue for another hour to explain why. Thank you very much, Ken Griffin.

Thank you.