WASHINGTON — Ray Dalio, founder of the hedge fund Bridgewater Associates, expressed deep concern on Sunday about the potential for an economic downturn more severe than a recession if President Donald Trump fails to navigate tariffs and broader economic policies carefully.
“I think right now we’re at a crucial decision point and very close to a recession,” Dalio said during an appearance on NBC News’ Meet the Press. “And I’m worried about something worse than a recession if this isn’t handled properly.”
Dalio was responding to moderator Kristen Welker’s question about whether Trump’s tariff policies might push the U.S. economy into a recession. He warned that the nation is experiencing a breakdown in the global monetary order, a topic he has often discussed on social media.
“We’re seeing significant shifts in both our domestic and global systems,” Dalio said. “It’s very reminiscent of the 1930s. I’ve studied history extensively, and patterns like this tend to repeat.”
He pointed to a combination of factors—rising debt levels, escalating tariffs, and growing tensions between emerging powers and established ones—as particularly volatile. “If not managed wisely, these conditions could result in something far more damaging than a typical recession,” he cautioned.
Dalio has recently voiced concerns about the ballooning U.S. debt, the country’s dependence on foreign creditors like China, and the erosion of domestic manufacturing capabilities—factors that, he argues, leave the U.S. economically vulnerable.
Still, Dalio maintained that the situation is manageable if proactive steps are taken. He urged Congress to make a serious commitment to reducing the budget deficit, suggesting a target of 3% of GDP.
“If they don’t, we’re heading toward a supply-and-demand crisis for debt, layered on top of all these other risks,” he said. “That mix could have consequences far worse than a standard recession.”
Pressed on what a worst-case scenario might look like, Dalio warned of a collapse in the value of money, severe internal conflict disrupting democratic norms, and international tensions that could spill into military conflict—conditions that would severely destabilize the global economy.
Dalio has a record of accurately predicting financial turmoil, including his early warnings in 2007 about systemic risks ahead of the 2008 financial crisis. His hedge fund, Bridgewater, predicted that rising interest rates could trigger a financial system breakdown—just months before the recession hit.
In a lengthy post on X last week, Dalio acknowledged the significance of Trump’s temporary easing of tariff increases but emphasized that deeper, more structural forces are at play.
“While tariffs are important, most people are missing the much larger forces driving today’s world,” he wrote. “We’re seeing a classic breakdown of monetary, political, and geopolitical orders. These shifts happen only once in a lifetime—but history shows they’re always preceded by unsustainable conditions like the ones we see today.”
(Source)