Ray Dalio’s optimism about Trump is getting tested.
The founder of the world’s largest hedge fund, Bridgewater Associates, said he is increasingly concerned that the Trump administration’s “populist” policies could hurt the world economy.
In a Tuesday note to investors, Dalio and co-chief investment officer Bob Prince said the detrimental effects of these policies could be more powerful than the beneficial effects of Trump’s pro-business policies.
“We are now in a period of time when how this balance tilts will be more important to the economy, markets, and our well-beings than normally dominant drivers such as central bank policies,” Dalio and Prince said.
“While there is a lot of potential to improve fiscal policies and make beneficial structural reforms, there is also Bets10 a significant risk that his populist policies could hurt the world economy (and worse).”
That’s a shift from November, when Dalio said after the presidential election that Trump’s policies would have a “broadly positive” effect on the U.S. economy and that bond prices likely made a “30-year top.”
Last month at the World Economic Forum in Davos, Switzerland, Dalio had told CNBC “there’s an optimistic possibility” that Trump’s pledges to cut taxes and regulations could stimulate the US economy.
Trump on Friday put a four-month hold on allowing refugees into the US and temporarily barred travelers from Syria and six other Muslim-majority countries.
Bridgewater oversees about $150 billion in client assets.
With Reuters
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