Ray Dalio Says Slowing Economy And High Inflation Are Causes Of Concern
The presidential elections will be held in 2020 and until then the chances of a recession happening is less, says Ray Dalio, the founder of the Hedge Fund Bridgewater Associates.
Dalio has written in a blog post in LinkedIn that he expects the U.S. to have a growth that is less than many other countries. However, there is only a 35 percent chance of a recession occurring in the U.S. before then.
In Feb 2018, he had stated a 70 percent chance of a recession before elections, in a speech in Harvard. But 18 months back, he had given a 50 percent chance of a recession before the election. The reason he states is the growth spurt attitude taken by the Fed, along with a monetary tightening policy.
However, the Fed has taken an easier stance, with the economy weakening and with inflation issues, which had caused the markets to weaken. This condition is prevalent in other countries too, writes Dalio in a new blog post.
He further fears about the economic conditions of countries like Japan and Europe which show a growing weakening. Inflation, slowing economy and weak markets are hitting countries across the globe, he comments.
The Fed chief Jerome Powell has said that a patient approach will be taken towards interest rates this year. The fed does not have the firepower to put off a deep recession but can lower interest rates by more than 2 percent. However, the big sag can be manageable, says Dalio.
Ray Dalio is a fund manager who manages a $160 billion hedge fund, Bridgewater Associates. The Pure Alpha fund of Bridgewater had been able to top most of its peers last year with a return of 14.6 percent. The fund has been able to generate an annual return on an average by 12 percent for the past three decades, which is quite an achievement.