Famed hedge-fund investor Ray Dalio called time on the era of central bank stimulus, saying the global economy is heading toward a new stage where markets won’t get the same level of support from monetary policy makers.
“The directions of policy are reversing,” with central banks slowing the flow from their proverbial punch-bowls of stimulus, Dalio, chairman of Bridgewater Associates, the world’s largest hedge fund, wrote in a July 6 note. “Our responsibility now is to keep dancing, but closer to the exit and with a sharp eye on the tea leaves.”
Comments from central bankers “clearly and understandably”
signaled that stimulus will be tapered, Dalio wrote, ushering in “the end of that nine-year era of continuous pressings down on interest rates and pushing out of money that created the liquidity-fueled moves in the economies and markets.”
Dalio didn’t detail what he sees as the impact for stocks, which have hit record highs around the world this year, or bonds, where government yields remain below historical averages and credit premiums are similarly low. But, he suggested that investors face a riskier period.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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