Billionaire Ken Griffin, founder and CEO of the Citadel hedge fund, said working class Americans will bear the brunt of President Donald Trump’s punitive tariffs on U.S. trading partners.

“Tariffs hit the pocketbook of hardworking Americans the hardest,” Griffin said on CNBC’s “Closing Bell” Wednesday. “It’s like a sales tax for the American people. It’s going to hit those who are working the hardest to make ends meet. That’s my big issue with tariffs. It’s such a painfully regressive tax.”

Trump rolled out shockingly high levies on imports last month, triggering extreme swings on Wall Street. The president later went on to announce a 90-day pause on much of the increase, except for China, as the White House sought to strike deals with major trading partners. Trump has slapped tariffs of 145% on imported Chinese goods this year, prompting China to impose retaliatory levies of 125%.

Griffin, whose hedge fund managed more than $65 billion at the start of 2025, voted for Trump and was a megadonor to Republican politicians. But he has also criticized Trump’s trade policy, saying it risks spoiling the “brand” of the United States and its government bond market.

“The reason the American voters elected President Trump was because of the failed economic policies of Joe Biden and the inflationary shock that reduced the real incomes of every American household,” Griffin said. “The president really does have to focus on managing inflation, because I think it’s front and center, the primary score card that American voters are going to think about when it comes to this midterm election.”

The Wall Street titan said there is a “modest” risk of stagflation as higher tariffs create both inflationary pressures and slow down the economy. He said the trajectory of the economy largely depends on how Trump’s economic policy develops.

As laid out by Treasury Secretary Scott Bessent, Trump’s economic program takes a three-pronged approach: trade, tax cuts and deregulation.

“The question is, will all three of those come together to give us the growth that we need in our economy?,” Griffin asked. “That’s the real question we’re going to face over the next two years.”

WASHINGTON, D.C. — The Federal Reserve on Wednesday held its key interest rate unchanged as it waits for the Trump administration’s trade policy to take shape and sees its impact on a sputtering economy.

In a move that carried little suspense given the wave of uncertainty sweeping the political and economic landscape, the Federal Open Market Committee held its benchmark overnight borrowing rate in a range between 4.25%-4.5%, where it has been since December.

The post-meeting statement noted the volatility and how that is factoring into policy decisions.

“Uncertainty about the economic outlook has increased further,” the statement said. “The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”

However, the statement did not specifically address the tariffs, though Chair Jerome Powell is sure to be asked about them in his post-meeting news conference at 2 p.m. ET.

Finding the balance between the two elements of the Fed’s so-called dual mandate of full employment and stable prices has been made more difficult lately amid President Donald Trump‘s tariff push.

In noting that tariffs both threaten to aggravate inflation as well as slow economic growth, the statement raises the possibility of a stagflationary scenario largely absent from the U.S. since the early 1980s.

Policymakers have largely been in agreement that the central bank is in a good position, with the economy generally holding up for now, to be patient as it calibrates monetary policy.

The Fed’s deliberations come as the White House is locked on negotiations with top U.S. trading partners during a 90-day negotiating period that began in early April. Trump slapped 10% across-the-board tariffs on U.S. imports and threatened other individual “reciprocal” duties pending ongoing talks.

As near-daily headline changes gauge the trade war, the economy has been flashing conflicting signals on growth, inflation and consumer and business sentiment.

Gross domestic product, the broadest measure of economic performance, fell 0.3% in the first quarter, the product of slower consumer and government spending and a surge in imports ahead of the tariffs. Most Wall Street economists expect the economy will return to positive growth in the second quarter.

The FOMC statement noted that “swings in net exports have affected the data,” and held to its recent characterization that the economy “has continued to expand at a solid pace.”

Indeed, job growth has held up despite Trump’s efforts to pare down the federal work force. Nonfarm payrolls increased by 177,000 in April and the unemployment rate held at 4.2%, giving the Fed room to breathe if it expects a further economic slowdown.

Inflation has been ticking lower and approaching the Fed’s 2% target, but tariffs are expected to result in at least a one-time rise in prices. Trump has pushed the Fed to cut rates as inflation has eased. The central bank’s preferred gauge showed headline inflation at 2.3%, or 2.6% on core that excludes food and energy.

However, as with all aspects of the economy, it all depends on what happens with tariffs.

Recent indications of progress in negotiations along with some softening from the administration has helped reverse a huge stock market sell-off after the April 2 “liberation day” announcement from Trump. However, business surveys show a high degree of anxiety, with most managers reporting concerns about supplies and pricing from the tariffs.

Market pricing regarding Fed action has been volatile as well.

Heading into the meeting, pricing indicated virtually no chance of a cut this week and less than 30% probability of a move in June, with the next cut expected in July. Traders are pricing in a total three cuts this year, though that could change following Wednesday’s decision.

The committee’s decision to hold the benchmark rate steady was unanimous. The fed funds rate is used by banks for overnight lending but also feeds into other consumer debt such as mortgages, auto loans and credit cards.