Bridgewater Associates founder Ray Dalio has seen the future ”“ and, to him, it looks a lot like the 1970s.
In an interview with Yahoo Finance, the Westport-based hedge fund executive warned the U.S. is transitioning into a stagflation period similar to the Nixon-Ford-Carter years.
“I think that most likely what we’re going to have is a period of stagflation,” he said. “And then you have to understand how to build a portfolio that’s balanced for that kind of an environment.
“The past is a guide to what’s happening now,” Dalio added. “The environment that we’re in is beginning to be very much like that of the 1970s.”
Dalio noted the Federal Reserve, which initially delayed taking proactive action against the fraying economy by insisting inflation was “transitory,” faces a challenge with its new focus on hiking benchmark interest rate over the course of the year.
“What you have is an enough tightening by the Federal Reserve to deal with inflation adequately, and that is too much tightening for the markets and the economy,” he said. “The Fed is going to be in a very difficult place a year from now as inflation still remains high and it starts to pinch on both the markets and the economy.”
