Ray Dalio, founder of Bridgewater Associates LP, will speak on Tuesday, October 3, 2023 at the Greenwich Economic Forum in Greenwich, Connecticut, USA.
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Billionaire investor Ray Dalio on Thursday felt another vigilance about increasing US debt and deficits, saying that government bond markets should be frightened.
“I think we should be afraid of the bond market,” Dario said at an event at Paley Media Council in New York. “I… I am a doctor, I am looking at the patient, and I said you have this buildup, and this is very serious and I can’t tell you exactly how long you have.
The founder of Bridgewater Associates, one of the world’s largest hedge funds, has warned about inflating the US deficit over the years. Recently, investors began demanding low prices to buy bonds that cover the government’s massive budget deficit, boosting debt yields. The growing concern over the financial situation last week caused a downgrade to the famous credit rating from Moody’s.
Thursday’s 30-year Treasury yield traded at around 5.14%, at a level not seen since 2023.
With continued growth in spending and declining tax revenue, combined with rising funding costs, spiraling the deficit and pushing national debt beyond the $36 trillion mark. In 2024, the government spent more on interest payments than other spending outside of social security, defense and healthcare.
“We have a deficit of about 6.5% of GDP. That’s more than the market will bear,” Dalio said.
Dario said politicians are not hopeful that they can ease the difference and reduce the country’s debt burden. Earlier on Thursday, in a party’s line vote, House members approved governance that cut taxes and added military spending. Currently, the bill going to the Senate could expand the fear of a flare-up inflation, expand the deficit, expand the deficit and increase the deficit, as higher tariffs already focus on bond prices and raise yields.
“I’m not optimistic. I have to be realistic,” Dario said. “I think it’s the essence of our country’s challenges. Anything related to overcoming bipartisanship and political hurdles essentially means “give me more” that leads to these deficits. ”
