\n<\/p>\n
Billionaire investor Ray Dalio warned that the U.S. economy is stuck in a stagflation environment and said it would be a mistake for potential Federal Reserve Chairman successor Kevin Wersh to lower interest rates.<\/p>\n
The Bridgewater Associates founder said persistent inflationary pressures coupled with slow growth have created a backdrop that calls for caution from policymakers. <\/p>\n
“We are definitely in a stagflation period,” Dalio said on CNBC’s “Money Movers” on Monday. “Because of the issues that exist here, in terms of more immediate inflation, that’s very far from the target.”<\/p>\n
Dalio said if Wersch, who now has a clear path to succeeding Jerome Powell as the next leader of the Fed in mid-May, cuts rates, it would risk damaging confidence in the central bank at a critical moment.<\/p>\n
“Certainly, you wouldn’t cut interest rates right now,” Dalio said. He said, “You will lose your credibility. The Federal Reserve will lose its credibility, especially now. … If you look at the monetary policies of other countries, you won’t see them cutting.” “So whatever your benchmarks are, you may not be willing to cut…not with today’s information.”<\/p>\n
According to the CME FedWatch tool, traders are currently pricing in a 100% probability that the Fed will leave rates unchanged at this week’s meeting, with Fed funds futures indicating that policy is likely to remain on hold for the rest of the year.<\/p>\n
Dalio said the strength of corporate earnings doesn’t make sense for the dramatic rise in equities despite the ongoing war with Iran. Still, he said he recommends a 5% to 15% allocation to gold as an “effective diversifier.”<\/p>\n<\/div>\n
Billionaire investor Ray Dalio warned that the U.S. economy is stuck in a stagflation environment and said it would be a mistake for potential Federal Reserve Chairman successor Kevin Wersh to lower interest rates. The Bridgewater Associates founder said persistent inflationary pressures coupled with slow growth have created a backdrop that calls for caution from<\/p>\n","protected":false},"author":1,"featured_media":101873,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[2107,26045,5216,2952,4549,1246,712,6975,8697,21053],"class_list":{"0":"post-101871","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bible-news","8":"tag-cut","9":"tag-dalio","10":"tag-era","11":"tag-interest","12":"tag-kevin","13":"tag-rates","14":"tag-ray","15":"tag-shouldnt","16":"tag-stagflation","17":"tag-wersh"},"_links":{"self":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/101871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/comments?post=101871"}],"version-history":[{"count":1,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/101871\/revisions"}],"predecessor-version":[{"id":101874,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/posts\/101871\/revisions\/101874"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media\/101873"}],"wp:attachment":[{"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/media?parent=101871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/categories?post=101871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/christiancorner.us\/index.php\/wp-json\/wp\/v2\/tags?post=101871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}