romaine: tim griffin the head of citadel speaking with sonali basak. at the securities conference in the wall street of the south in miami. and back here on the real wall street the financial capital of the world here i am romaine bostick alongside katie greifeld. you off to the close

investors to revisit an allocation to china, they are going into your point as a business, and citadel securitieso be more specific, in that report. to broaden the conversation because he was here in hong kong on monday and tuesday, and back then, he mentioned the comments around china, he also talked about and has had to be part of the conversation where he thinks the economy is how the economy will be next year. and their information now, at some point, we will see a slowdown taking place because real rates have remained positive. that takes us into a comment in the last 15 minutes or so out of patrick harker, speaking at a university, talking about how monetary policy works with a lag, and that they should keep rates at the current level for that lag to work its way into the system to get out there, as well. not that that is anything new. that takes is really into jay powell, who will be speaking thursday morning, early morning, asia time, and maybe he might echo those same comments. rishaad: we are talking about inflation and they will have to keep rates higher for longer. it is the opposite

sonali: citadel securities, a massive market maker, gathered their clients this week on this topic, ask them what is the bull and bear case on bonds? the bear case is the idea of sustained higher yields in the treasury markets as a result of economic resiliency. we look at a few factors, including fiscal spending rising to historic levels, global bank balance sheet reductions, and increased spending tied to infrastructure and green energy. when we flip up the board and look at the bull case instead for lower yields, you are looking at cooling inflation. this is what drove the story this week. a tightening job market and moving higher in a higher interest rate environment. this last part is the big question on what really means for interest rates to be higher for longer and when that starts to break. when i spoke to ken griffin, he weighed in this week about the fed. >> the fed needs to stay on message that they will put the inflation genie back in the bottle and so if they cut too soon, i think they risk losing credibility around her commitment to a 2% -- around their commitment to a 2%

citadel securities had no rolein robinhood's decision to limit trading in gamestop. - so citadel is ave a marketmaker. - mr. griffin, why is this not consideredmanipulating a stock whenever you can shortsell to 140%? don't youthink there should be a limit on something like that? ken griffin:i'm not sure it's worth us delvinginto legislative corrections for a very unique situation, in terms of the extremesize of the short interest. - why is it that a stockcan be shorted over 100%? i don't even knowhow you're allowed to do that. congressman: mr. plotkin, you made the commentin your testimony a minute ago that you were not tryingto manipulate stock. yet if you're shortselling a stock 140%, explain to me why that'snot manipulating the stock. - any time we short a stock, our systems actually force usto find a borrower. so we alwaysshort stocks within the context of all the rules. - the fundamental reasonwhy this happened isn't because we wanteda revolution against hedge funds.it was because there wasan opportunity out there to form a short squeezeon a stock and make some money off of it. a

. >> on one hand, ken griffin, citadel, the hedge fund and security's, which is an intermediary.ved in the bases trade from all angles, if you will. the interesting thing is he said the sec is searching for problem and if regulators are really worried about the side of the bases trade, they could ask the banks to conduct stress test to see if they have enough collateral. the banks are already facing stress tests. number two, it is amazing to most people on wall street how opaque the treasury market is when it comes to leverage under the system, when it comes to clearing on all parts. there's a lot of discussion around central clearing and why the bases trade can so easily become a trade that is levered 100-1. there's a counterpart. this is also a trade that is also put on in part by treasury short or futures short. those traits already require a certain degree of collateral here. we also know regulators are thinking about broader haircuts from the banking system. so when part of the trade could require more margin as well. there's a lot potentially changing about the trade. what