Ray Dalio, founding father of Bridgewater Associates LP, speaks on the Abu Dhabi Finance Week (ADFW) convention in Abu Dhabi, United Arab Emirates, on Tuesday, Dec. 10, 2024.
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Bridgewater founder Ray Dalio mentioned on Sunday that he’s anxious that the turmoil ensuing from President Donald Trump’s tariff and financial insurance policies will threaten the worldwide financial system.
“Proper now we’re at a decision-making level and really near a recession,” Dalio mentioned on NBC Information’ “Meet the Press.” “And I am anxious about one thing worse than a recession if this is not dealt with effectively.”
The hedge fund billionaire mentioned he is extra involved about commerce disruptions, mounting U.S. debt and rising world powers bringing down the worldwide financial and geopolitical construction that has been in place because the finish of World Warfare II.
“We’re going from multilateralism, which is basically an American world order kind of factor, to a unilateral world order through which there’s nice battle,” he mentioned.
Dalio mentioned 5 forces drive historical past: the financial system, inside political battle, the worldwide order, know-how and acts of nature comparable to floods and pandemics. Trump’s tariffs have comprehensible targets, Dalio mentioned, however they’re being applied in a “very disruptive” means that creates world battle.
The president’s quickly altering tariff insurance policies have upended worldwide commerce. Trump on Wednesday introduced a 90-day pause on his “reciprocal tariffs,” however he stood agency on 10% baseline duties and 145% reciprocal tariffs on China.
Then, U.S. Customs and Border Safety introduced an exemption from the reciprocal tariffs for Chinese language-made shopper electronics like smartphones, computer systems and semiconductors late Friday, although the merchandise stay topic to a 20% tariff imposed earlier within the 12 months. However Commerce Secretary Howard Lutnick backtracked on Sunday and mentioned the exemption was not everlasting.
In a Wednesday put up on X, Dalio referred to as for the U.S. to negotiate a “win-win” commerce settlement with China that might admire the yuan towards the greenback. He additionally referred to as for each nations to deal with their rising money owed.
Dalio on “Meet the Press” mentioned on Sunday that Congress ought to scale back the federal deficit to three% of gross home product, echoing feedback he made at CNBC’s CONVERGE LIVE occasion in March.
“If they do not, we will have a supply-demand drawback for debt concurrently we’ve got these different issues, and the outcomes of that might be worse than a standard recession,” Dalio mentioned.
The very worth of cash is at stake, Dalio mentioned. A breakdown within the bond market, mixed with occasions like inside and worldwide battle, may very well be an much more extreme shock to the financial system than President Richard Nixon’s cancellation of the gold customary in 1971 and the worldwide monetary disaster in 2008.
That change is avoidable, Dalio mentioned, if lawmakers work collectively to trim the deficit and the U.S. discourages battle and inefficient coverage on the worldwide stage.
PRO: Watch CNBC’s full interview with Bridgewater founder Ray Dalio
