“Steve Jobs from investing” called the timing of a deep recession in the US

As part of the trend to tighten monetary policy (MP), the Fed may raise interest rates from the current 3.75-4% to 5.5-6% per annum, which will be a serious blow to the US economy, predicts Ray, founder of hedge fund Bridgewater Associates Dalio.

The legendary investor, often referred to in the media as the “Steve Jobs of investing,” noted in an interview with Business Today that as a result of the current tightening of monetary policy, inflation in the United States is already showing a deceleration trend to 4.5-5%. Nevertheless, this will inevitably lead to an increase in interest rates that is “harmful” for the economy: “The real interest rate in this case should be 1.5% higher than inflation. This means that it will eventually have to reach 6%, which is what the Fed will achieve. This will have an extremely negative, harmful effect on the economy,” says Dalio. As of November, US inflation stood at 7.7% after 8.2% in October.

Dalio notes that in the current situation, the likelihood of a permanent budget deficit at the level of 5% of GDP in the United States is very high. So far, the investor points out, the levels of wages of American workers and general employment indicators show very high stability. This means that demand remains and in this regard, inflationary growth will be higher than market expectations, he concludes.