America’s economy is on a ‘sugar high’ warns Ken Griffin, and investors retreating to gold is one sign of a comedown

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Speaking in New York, he said fiscal and monetary policies have created a “sugar high” that masks underlying risks like inflation and dollar weakness. Despite booming equities, Griffin pointed to gold’s record surge—up more than 50% this year—as evidence investors are quietly hedging against U.S. sovereign risk.Markets are going from strength to strength, boosted by the promise of AI and the enormous investments being plowed into the tech sector. Moreover, consumer spending is continuing to hold up despite sticky inflation and a weaker job market, providing a steady foundation for growing business confidence.But Citadel founder and CEO Ken Griffin is warning this optimism may be synthetic, drawn from fiscal and monetary stimulus that is better suited to a shrinking economy than a growing one. The billionaire hedge fund manager said those policies may be good news for markets, but they are the kind of measures that would normally be expected during a recession.U.S. businesses and consumers are waiting to feel the effects of President Trump’s “One Big Beautiful Bill Act,” which the White House has described as the “largest tax cut in history for middle- and working-class Americans.” In addition, the Oval Office has been pressuring the Federal Open Market Committee (FOMC) to cut the base rate significantly (despite inflation staying persistently above its 2% target) in the face of a slowing job market—saying the current rate of 4% to 4.25% is more restrictive than necessary. At its last meeting, the FOMC capitulated and axed interest by 25 basis points, creating cheaper borrowing for consumers, businesses, and the government itself.This environment means “we’re definitely on a bit of a sugar high in the U.S. economy right now,” according to Griffin. Speaking at a Citadel conference in New York yesterday, Griffin said: “Markets are seeing the enthusiasm that the Trump administration has created in the American investing public and in corporate America … It’s important to understand that this administration is clearly trying to encourage economic growth in the U.S.; they are pursuing a set of policies to reindustrialize America; and they are unquestionably interested in America’s prosperity in a way that we have rarely seen from administrations in years past.”Trump 2.0 is also “very much aligned” with making life better for the average American household, Griffin continued, and “this backdrop is fueling much of the enthusiasm that we see in markets in the U.S.”—even though it may be more appropriate for the middle of a recession as opposed to a “period of near full employment a few years into the business cycle.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,753.11 +38.52 (+0.57%)Dow 3046,624.08 +21.10 (+0.05%)Nasdaq23,025.17 +236.81 (+1.04%)Russell 20002,478.70 +20.27 (+0.82%)VIX16.42 -0.82 (-4.76%)Gold4,063.10 +58.70 (+1.47%)PortfolioSign in to access your portfolioSign inTop gainersDGNX Diginex Limited 30.16 +5.95 (+24.61%)NTLA Intellia Therapeutics, Inc. 25.23 +4.79 (+23.43%)APGE Apogee Therapeutics, Inc. 47.02 +7.29 (+18.35%)RXRX Recursion Pharmaceuticals, Inc. 6.13 +0.89 (+17.11%)STUB StubHub Holdings, Inc. 19.96 +2.59 (+14.91%)Top losersNNE NANO Nuclear Energy Inc. 48.11 -8.52 (-15.05%)FICO Fair Isaac Corporation 1,711.11 -168.44 (-8.96%)MFH Mercurity Fintech Holding Inc. 29.28 -2.73 (-8.53%)OPEN Opendoor Technologies Inc. 8.49 -0.81 (-8.67%)MENS Jyong Biotech Ltd. 50.55 -4.56 (-8.27%)Most activeOPEN Opendoor Technologies Inc. 8.49 -0.81 (-8.67%)BULL Webull Corporation 12.45 -0.36 (-2.77%)RGTI Rigetti Computing, Inc. 42.43 -1.47 (-3.34%)AMD Advanced Micro Devices, Inc. 233.52 +22.01 (+10.40%)PLUG Plug Power Inc. 3.6250 -0.2450 (-6.33%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersAMD Advanced Micro Devices, Inc. 233.38 +21.87 (+10.34%)RXRX Recursion Pharmaceuticals, Inc. 6.13 +0.89 (+17.11%)NTLA Intellia Therapeutics, Inc. 25.19 +4.75 (+23.24%)TEM Tempus AI, Inc. 102.66 +9.65 (+10.37%)CRSP CRISPR Therapeutics AG 76.97 +6.35 (+8.99%)Top economic events