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The founder of Bridgewater Associates, one of the world’s largest hedge funds, has voiced concern that President Donald Trump’s economic agenda could lead to “something worse than a recession.”
“Right now, we are at a decision-making point and very close to a recession,” billionaire investor Ray Dalio told NBC’s Meet the Press on April 13. “And I’m worried about something worse than a recession if this isn’t handled well (1).”
A recession is typically defined as two consecutive quarters of negative GDP growth. A much more “profound” change would be a breakdown of the current monetary order (it’s worth pointing out that Dalio correctly predicted the 2008 financial crisis).
Trump has triggered global economic chaos with his on-again, off-again tariffs (2). But Dalio fears something worse — the U.S. could end up isolated as its biggest trading partners sign cross-border agreements which exclude the world’s largest economy (3).
“But by and large, it’s changing the world order in a way which is making it more inefficient and actually causing growth around the United States,” Dalio said during the Paley Media Council event on May 22 (4).
The end of the Second World War ushered in a new monetary and geopolitical world order. But history tends to repeat itself. Tariffs, combined with a high level of debt and a rising superpower challenging the existing superpower, could lead to “profound changes” in the world order.
“Such times are very much like the 1930s,” he told NBC.
“These go in cycles that can be measured, and I worry about the breakdown of that kind of order, particularly since it doesn’t need to happen,” he noted, adding that there are better ways to restructure debt.
Whether tariffs are implemented in a “stable” way or a “chaotic and disruptive way” can make “all the difference in the world,” he said. But so far, the tariffs have been akin to “throwing rocks into the production system.” In other words, highly disruptive.
Despite Dalio’s warning, recent data suggest the U.S. economy continues to grow, increasing by an estimated 1.9% in 2025 (5), though there are still signs of concern.