Bridgewater Founder Ray Dalio Warns of Stagflation in US Economy

Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund management firm, has diagnosed the US economy as having entered a 'stagflationary' phase, characterized by simultaneous high inflation and economic slowdown.

He analyzed that the current high inflation rate is moving further away from the US central bank's (Fed) target, and warned that if the Fed Chair nominee cuts interest rates after taking office, it could deal a significant blow to its credibility.

Dalio recently assessed that the stock market rebound, driven by strong corporate earnings amid geopolitical risks, is justifiable. He recommended allocating 5-15% of a portfolio to gold for diversification.