| On Thursday, Sonali Basak, Bloomberg Television’s global finance correspondent, interviewed Citadel’s Ken Griffin about the incoming Republican administration and was struck by his thoughts about the deficit. Plus: What happens when hospitals rely on ill-trained nurse practitioners, and why Amazon.com is pitching a new Black Friday football tradition. If this email was forwarded to you, click here to sign up. I asked Ken Griffin, simply, what’s most on his mind. Because the billionaire oversees the world’s most profitable hedge fund and donated more than $100 million toward down-ballot races this election cycle, it wasn’t clear to me whether he’d choose a market matter or a personal one. He didn’t donate to Donald Trump’s campaign, so I wasn’t sure how open Griffin would be about politics just two weeks after the president-elect’s victory. In some ways, Griffin’s response was both personal and practical. Addressing the crowd of hundreds at the Economic Club of New York, he answered me with what worries him most: the posturing around immigration policy and the direction of inflation. He also raised what’s probably the most abundant frustration among investors: the national deficit. “You asked what I worry about? Will Team Trump, will this administration, be able to find a path to put America’s fiscal house back in order?” Griffin said. “We cannot continue to run this level of profligate spending, and that’s a big issue.”  Griffin, founder of Citadel, in conversation with Basak on Thursday at the Economic Club of New York. Photographer: Yuki Iwamura/Bloomberg I had the numbers in my back pocket because it’s an issue I’ve been following closely. Investors who are worried about the US fiscal situation have been selling off in a frustrating manner, often sending the 10-year yield beyond 4.5%. When bond prices fall, yields rise—and interest rates on other types of debt such as mortgages are more closely tied to those long-term yields. That’s one reason home loan rates keep rising even as the Federal Reserve has started to cut interest rates. It’s also why corporations can still borrow from banks at extremely low levels, but it’s hard for the average American to go out and get a loan. The crowd at the Economic Club has had time to consider fiscal disorder. In early September, Trump outlined his economic plan there. He pitched cutting corporate taxes to 15% for companies manufacturing in the US. According to the Committee for a Responsible Federal Budget, that would increase the deficit by $200 billion over 10 years. Such tax reductions and another set of similar plans would contribute $7.5 trillion to the deficit over a decade, the CRFB estimated. Extending and modifying the Tax Cuts and Jobs Act from Trump’s first term would be the biggest contributor to those losses: roughly $5.4 trillion. By comparison, “reducing waste, fraud and abuse” would save the federal budget only $100 billion, according to the CRFB. That’s one big task now largely in the hands of Vivek Ramaswamy and Elon Musk, who are overseeing a proposed department of government efficiency. They said in a Wall Street Journal opinion article that they’ll target five times that amount. Even if Musk and Ramaswamy achieve their goal, it’s still cutting into a very small portion of the estimated shortfalls. The math is grim. “I don’t think we have the fiscal room to cut taxes from where they are today,” Griffin said, “and I think there’s a real question about where do we need to raise taxes to start to put our house in order.” He said Trump in his first term made a bet that cutting taxes would contribute to productivity gains, but it’s hard to know whether that bet paid off, given the regulatory constraints on corporate America’s growth during President Joe Biden’s administration. Griffin thinks that made businesses less productive. Other Trump policies pose risks to the economy, markets and the direction of interest rates as well. A crackdown on immigration, for example, could spur inflation, especially when immigrants populate jobs everywhere from restaurant kitchens to the C-suite in Silicon Valley. The issue is quite circular. Higher inflation can lead to higher interest rates, and the US government’s borrowing costs are one of the biggest expenses in the national budget. I asked Griffin whether the bond market would face problems as the national debt load swelled. He said the country clearly can’t sustain this deficit for the next 20 years. Related: Ken Griffin Open to Citadel Stake Sale, Warns of Tariff Risks | 
