- Bridgewater Associates founder Dalio issued warning in interview on Monday
- Said that US could be headed for stagflation similar to the 1970s
- Stagflation is the combination of high inflation and low economic growth
Billionaire hedge fund founder Ray Dalio has warned that the US economy is headed for ‘stagflation’ similar to that of the 1970s.
‘I think that most likely what we’re going to have is a period of stagflation. And then you have to understand how to build a portfolio that’s balanced for that kind of an environment,’ Dalio told Yahoo Finance in an interview published on Monday.
Stagflation is defined as a period of high inflation paired with an economic slowdown and rising unemployment — an unusual combination that the US faced in the 1970s, when oil crises and failed monetary policy stunned the economy.
“When He opened the third seal, I heard the third living creature say, “Come and see.” So I looked, and behold, a black horse, and he who sat on it had a pair of scales in his hand” Rev. 6:5
Inflation is currently running at its highest level in 40 years, with the consumer price index hitting a 7.9 percent annual rate in February.
The Federal Reserve, which long delayed action insisting that inflation was ‘transitory’, finally responded at its March meeting by raising the benchmark interest rate by 25 basis points, with further rounds of hikes expected.
But Dalio argues that the Fed now faces a bind in which rate hikes will either be too low to reduce inflation, or too high for the economy to withstand.
The Federal Reserve, which long delayed action insisting that inflation was ‘transitory’, finally responded at its March meeting by raising the benchmark interest rate by 25 basis points, with further rounds of hikes expected.
But Dalio argues that the Fed now faces a bind in which rate hikes will either be too low to reduce inflation, or too high for the economy to withstand.
Read More @ Daily Mail HERE
