Citadel’s Ken Griffin Warns Of Global Recession If Strait Of Hormuz Stays Closed: Report

• Griffin reportedly criticized President Donald Trump’s approach to the war in Iran, calling it a mistake.
• He added that the regime change success that the U.S. experienced following its Venezuela operation gave President Trump false confidence that he could repeat this with Iran.
• The International Monetary Fund on Tuesday warned that the global economy is at risk of recession if the Iran war continues and high crude oil prices persist.

Citadel CEO Ken Griffin on Tuesday reportedly warned of a global recession if the Strait of Hormuz remains closed for a longer period of time, a day after the U.S. enforced a blockade of Iranian ports amid the ongoing war with Iran.

“Let’s assume [the Strait is] shut down for the next six to 12 months — the world’s going to end up in a recession. There’s no way to avoid that,” Griffin said on stage at the Semafor World Economy conference, according to a report by CNBC.

He added that, as a result of this crisis, there will be a shift toward alternative energy sources such as wind, solar, and nuclear, according to the report.

Griffin Says Trump’s Iran War Approach Was A Mistake

The billionaire founder of Citadel reportedly criticized President Donald Trump’s approach to the war in Iran, calling it a mistake.

“We did not position this issue with the world through the right talking points, and nor did we bring our allies on board with us. And I think that was a mistake,” Griffin said, according to a report by The Wall Street Journal.

He added that the regime change success that the U.S. experienced following its Venezuela operation gave President Trump false confidence that he could repeat this with Iran.

Soaring Crude Oil Prices

Griffin’s comments come amid soaring crude oil prices after the beginning of the Iran war in February this year, with WTI and Brent crude futures surging nearly 43% and 36%, respectively.

The United States Oil Fund ETF (USO) fell about 3%, while the ProShares Ultra Bloomberg Crude Oil ETF (UCO) was down nearly 2% at the time of writing.

The International Monetary Fund on Tuesday warned that the global economy is at risk of recession if the Iran war continues and high crude oil prices persist.

“This would mean a close call for a global recession (growth rate below 2 percent), which has happened only four times since 1980, with the latest two occasions corresponding to the global financial crisis and the COVID-19 pandemic,” the IMF stated.

Meanwhile, U.S. equities gained in Tuesday morning’s trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, gained 1%; the Invesco QQQ Trust ETF (QQQ) rose 1.31%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.64%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bearish’ territory.

Also See: Kevin Warsh's Hearing For Fed Chair Position Reportedly Set For Next Week — Trump's Fed Nominee Discloses More Than $100M In Wealth

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