Hedge fund billionaire expects pain as the U.S. Federal Reserve raises interest rates
Ray Dalio, the billionaire investor who built Bridgewater Associates into one of the world’s biggest hedge funds, said a “perfect storm” is forming that will spread economic pain as the U.S. Federal Reserve raises interest rates.
Domestic tension in the U.S. population caused by “irreconcilable differences” and a yawning wealth gap, combined with international conflicts, are contributing to the perfect storm, he said.“The Fed and the government together gave enormous amounts of debt and credit and created a lurch forward. A giant lurch forward and created a bubble. Now they’re putting on the brakes. So now we’re going to create a giant lurch backward,” Dalio said at the Greenwich Economic Forum.
Interest rates above 4.5% could tip the economy into a downturn, he said. “I don’t know whether that’s 4.5% or the economy could not take an interest rate much higher than that before it’s going to be negative.”
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