Ken Griffin said Tuesday that investors were caught flat-footed by the “grit and perseverance of the Iranian people,” after a flare-up that he said showed how quickly the balance of power can shift. The Citadel CEO, speaking at Semafor's World Economic Forum, said the world is now dealing with consequences that market participants and geopolitical forecasters cannot undo.
Griffin said the latest attacks on Iran by the United States and Israel had been withstood as well as they could have been, and added that this was not a critique of the US military. But he argued that a closure of the Strait of Hormuz for 6 to 12 months would trigger a global recession no matter what, because the world would be hit by a classic energy price shock.
The Strait of Hormuz remains one of the world’s most important energy chokepoints, with a significant share of global oil and natural gas moving through the narrow waterway. Griffin said the United States is somewhat insulated by its energy production capabilities, but that any shutdown would be front and center for countries in Asia and Europe, which would feel the strain most directly.
He said the response should have included a more united front with European allies, saying the United States should have done more to bring them on board with the strikes. Griffin also applauded President Donald Trump’s administration for pursuing a nuclear-free Iran, while arguing that the history has been forever changed.
Beyond the immediate shock to fuel markets, Griffin said central banks would then have to decide whether the inflation spike caused by surging energy prices is enough to raise interest rates. He tied that risk to broader pressure on households, saying higher inflation and fears that artificial intelligence will make scores of jobs obsolete are creating “a very stressful period for the American worker.” He also said he has faith in Kevin Warsh, Trump’s nominee to lead the Federal Reserve, and described him as thoughtful and independent when it comes to the central bank’s dual mandate.
For Griffin, the warning was not about theory. It was about a market already forced to absorb a new reality, one in which Iran has absorbed the blows it took, energy prices can still jump, and the next shock could spill far beyond the Gulf.