Dalio Says Bonds Face Biggest Bear Market in Almost 40 Years
Billionaire hedge-fund manager Ray Dalio said that the alliance sell has plunged into a bear period and was indicated that a rise in harvests could provoke the biggest crisis for fixed-income investors in approximately 40 years.
” A 1 percent rise in alliance harvests will make the largest bear market in bonds that we have envisioned since 1980 to 1981 ,” Bridgewater Associates founder Dalio said in a Bloomberg TV interview in Davos on Wednesday. We’re in a bear market, he said.
A Treasury selloff increased following Dalio’s comments, pushing 10 -year harvests through 2.65 percent, near the most important one since mid-2 014.
Dalio predicted that the Federal Reserve will stiffen monetary policy faster than they have signaled, and said that economic swelling is still in late stagecoach of the hertz but could continue to improve for another two years. The current financial home is good for assets but bad for bail investors, said Dalio, who’s chair of Bridgewater, the world’s biggest hedge fund.
” It appears stupid to own cash in this kind of environment. It’s going to be great for earnings and great for foreplay of growth ,” he said.
That spurt will last-place for about 18 months and the central bank will then feel like it has to tighten monetary policy faster than the discounted crop bow, he said. That will be a negative for asset premiums, he said.
Demand for attachments will fall as central bankers reduce cash stimulus, but big insufficiencies mean that governments will need to sell more of the securities to raise money, Dalio said. That supply-demand imbalance will pertain the central bankers, he said.
Bridgewater finagles about $160 billion, according to its website.