Billionaire Ray Dalio has already predicted a storm is coming. The founder of the world’s largest hedge fund Bridgewater Associates who once anticipated the 2008 financial crisis now worries that President Donald Trump’s tariff imposition may prompt “something worse than a recession.”
Sitting down for a thought-provoking conversation on NBC’s Meet the Press last week, the 75-year-old billionaire investor said, “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.”
Billionaire Ray Dalio on a potential recession
The author of the book “How Countries Go Broke: The Big Cycle” then added, “A recession is two negative quarters of GDP and whether it goes slightly there. We always have those things. We have something that’s much more profound. We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money.”
We report Ray Dalio’s comments just after days after Trump insisted that trade talks with China are on behind the scenes even though the latter hasn’t indicated any signs to confirm the US president’s proclamations. Half-way through the month, it’s clear that April has been all about global stock markets being hit with a figurative wrecking ball as the US and China also continue their retaliatory tariff war.
History repeats itself: Ray Dalio
Mapping out a cyclic historical pattern, he continued shedding light on the “profound changes in our domestic order … and world order.” Redirecting focus to how history on this front “repeats over and over again,” he added, “If you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders, the systems, are very, very disruptive. How that’s handled could produce something that is much worse than a recession. Or it could be handled well.”
The billionaire hedge fund manager said Congress members can manage the situation “very well” but if they don’t, the worst-case scenario could potentially bring on a “supply-demand problem for debt at the same time as we have these other problems.” Warning that the outcome would be “worse than a normal recession,” he also cautiously spoke about how “the value of money, internal conflict that is not the normal democracy as we know it, an international conflict in a way that is highly disruptive to the world economy and could even be a military conflict.”
Ray Dalio on Trump tariffs: I agree with the problem
Further discussing the impact of tariffs and the state of the economy, Dalio joined CNBC’s Squawk Box, where he said, “Mechanistically, it raises costs, it lowers revenues for companies… and capital is going to be harder to come by. And then we’re trying to replace manufacturing. I agree with the problems… about that we don’t manufacture. There’s a problem with that. But then there’s this structural problem of whether we can manufacture.”
“We have a population that basically 3 million people – 1% of the population – is incredibly brilliant… half of which are foreigners. At the same time, we have the 10% of the population around them that’s doing very well. The 60% of the population has below a sixth-grade reading level and it’s tough to be productive.”
During that interview too, he urged that there was a need to get the budget deficits down to 3% of GDP. Reiterating that he agreed with the problem, the question is ‘how do you create that self-sufficiency?’ “So from a practical point of view, that manufacturing is very difficult under this set of circumstances under the United States, yet it is needed,” he weighed in. Confirming his stance on the issues raised by Donald Trump, Dalio said “I agree with the problem, I am very concerned about the solution.”
Billionaire investor’s
Earlier this month, Ray Dalio shared a lengthy X post noting that even though Trump tariffs were “very important developments,” people are mostly overlooking the vastly more important forces that are driving just about everything, including the tariffs.”
https://t.co/Xpdl8fYoBg
— Ray Dalio (@RayDalio) April 7, 2025
Much like his remarks in the Sunday interview, he wrote at the time, “The far bigger, far more important thing to keep in mind is that we are seeing a classic breakdown of the major monetary, political, and geopolitical orders.” Further redirecting focus to how even though “this sort of breakdown occurs only about once in a lifetime… they have happened many times in history when similar unsustainable conditions were in place.”
Bridgewater Associates founder correctly predicted the 2008 financial crisis. Just months after the hedge fund issued a warning about the uncertainty “how this financial contagion will play out” unless “there is a cracking of the financial system” the recession commenced.
