Fed cut was largely symbolic, Citadel’s Ken Griffin says.

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Citadel’s Ken Griffin said that the Federal Reserve's recent rate cut was largely symbolic, to show that they are concerned about the labor market rather than inflation.

"The 25 basis point cut will not have a meaningful impact on capital investment or capital formation, but it is a signal from the Fed that they are now more focused on labor market strength than they are concerned about inflation. So do you see more cuts coming? I think they're going to cut one time more this year, two on the outside," Griffin told CNBC.

Earlier in September, the Fed trimmed [https://seekingalpha.com/news/4495784-federal-reserve-lowers-rate-by-25-basis-points-first-cut-since-december] its policy rate by 25 basis points to 4.00%-4.25%, acknowledging a softening labor market even as inflation perked up in recent months.

Griffin also expects that inflation will run in the 2.5%-3% range next year, above the Fed's 2% goal. He, however, warned that the central bank should not lose their credibility and their ability to manage inflation. "The American voter is exhausted of inflation," he said.

He also warned that slowing immigration can limit job creation, adding that a tighter labor supply could cap growth. "We do know is that U.S. population growth is much lower without the influx of immigrants, that's going to bring our ability to create new jobs down," he said.

Griffin also called tariffs a national sales tax in some sense and added that it is paid disproportionately by those who can least afford to pay it.

However, Griffin also said that corporate America is poised to benefit from a weaker dollar and investments in artificial intelligence capabilities.

"We saw in today's GDP, number between consumer strength and business investment. The future the American economy is doing. It's doing pretty well right this minute," he said.

U.S. Q2 GDP growth, at an annual rate, was revised [https://seekingalpha.com/news/4498811-us-q2-gdp-revised-higher-to-38-in-third-estimate-intensifying-rebound] up to +3.8% Q/Q in its third estimate from the prior estimate of +3.3%, mainly from an increase in consumer spending.

Wall Street’s recent downward push continued on Thursday, as the broader market averages observed selling pressure after jobless claims fell and GDP was revised higher in the third estimate.

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