Ken Griffin Expresses Disbelief At Widening US CDS Spreads: ‘You Gotta Be Kidding Me’

Citadel founder and CEO Ken Griffin reportedly expressed disbelief that insurance to cover a potential U.S. default is priced at levels similar to those in some European countries.

"I never thought in my life I would see the U.S. priced higher in risk cost than a number of countries like Spain, Germany, or France," he said at the Forbes Iconoclast Summit, according to a Reuters report. "You gotta be kidding me.”

Although Griffin acknowledged that prices have been impacted by some liquidity issues in the credit default swaps (CDS) market, he called the conversations surrounding the swap prices “unfathomable.”

CDS is an agreement between two parties where one party agrees to compensate the other in the event of a default. The instrument was in the spotlight during the 2008 financial crisis when investors like Michael Burry and Steve Eisman shorted the housing market using CDS.

The Reuters report, citing S&P Global Market Intelligence, stated that spreads on U.S. five-year CDS stood at 48 basis points (bps) on Thursday, compared to 50 bps for Italy, 32 bps for Spain, and 35 bps for France.

The report added that in recent weeks, the United States’ sovereign CDS spreads hit their highest mark since the debt ceiling crisis of 2023.

"The United States' fiscal house is not in order. You cannot run deficits of six or 7% at full employment after years of growth. That's just fiscally irresponsible," Griffin said.

Meanwhile, U.S. benchmark indices pared some of their early losses to trade in the green after Chinese state media reported that President Donald Trump held calls with Chinese President Xi Jinping.

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, traded 0.43% higher on Thursday morning, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq Composite, was up by 0.73%.

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