Ray Dalio, the billionaire founder of Bridgewater Associates, one of the world’s largest hedge funds, recently expressed concerns about the impact of President Trump’s trade war on the US economy. In an interview on NBC’s “Meet the Press,” Dalio stated that the trade war has brought the US dangerously close to a recession.
When asked about the possibility of the US economy entering a recession due to the ongoing trade war, Dalio responded, “I think that right now we are at a decision-making point and very close to a recession.” This statement comes at a time when global markets are experiencing significant volatility as a result of the trade tensions between the US and its trading partners.
Dalio highlighted the disruptive nature of the tariffs imposed by the Trump administration, likening their impact to “throwing rocks into the production system.” He also expressed concerns about the combination of US debt, the US budget deficit, and escalating global political tensions, all of which could further exacerbate the economic challenges facing the country.
The tariff plan, which includes duties on multiple countries, has been subject to sudden changes in start dates, with a 90-day pause announced for goods from many countries except China. This uncertainty and unpredictability in trade policies have added to the economic uncertainty and market volatility.
Dalio warned that the current situation in the market could potentially be more severe than past financial crises, such as the ones experienced in 1971 and 2008. He emphasized the need for careful handling of the trade war, debt, and geopolitical tensions to prevent a more severe economic downturn.
With over 50 years of experience in the financial industry, Dalio founded Bridgewater Associates and has a diverse client base that includes pension funds, foundations, and central banks. His insights into the current economic challenges facing the US provide valuable perspective on the potential risks and implications of the ongoing trade war and other geopolitical factors on the global economy.
