Ray Dalio, the billionaire investor and founder of hedge fund Bridgewater Associates, said on Sunday the United States is “very close to a recession.”
In an interview on NBC News’s “Meet the Press,” Dalio expressed concern about a confluence of different economic and political factors that he said could send the U.S. economy into “something worse than a recession.”
“I think that right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well,” Dalio said when asked whether he thinks the U.S. will likely dip into a recession “because of President Trump’s tariffs.”
Dalio said he’s particularly concerned about U.S. debt and urged lawmakers to pledge to get the budget deficit down to 3 percent.
“If they don’t, we’re going to have a supply/demand problem for debt at the same time as we have these other problems. And the results of that will be worse than a normal recession,” he added.
The debt, coupled with Trump’s tariffs — as well as the “profound changes in our domestic order” and “profound changes in the world order” — could lead to a “very, very disruptive” outcome, Dalio said.
“Such times are very much like the 1930s. I’ve studied history. And this repeats over and over again,” he said, adding, “How that’s handled could produce something that is much worse than a recession. Or it could be handled well.”
Earlier this month, the White House announced a 10 percent baseline tariff on foreign imports, as well as steeper “reciprocal” tariffs on dozens of other countries, including many key trading partners. The president later announced a 90-day pause on higher tariffs for trading partners, bringing the tariff rate for foreign countries back to 10 percent during that time.
That alteration did not apply to China, however. Trump has ratcheted up reciprocal tariffs on China to 125 percent on top of 20 percent levies, leading to a proportionate response from Beijing. That has escalated fears of a massive trade war between the world’s two largest economies. On Friday, the White House announced it is exempting electronics from the “reciprocal” tariffs imposed on nations, including China.