Ray Dalio: "Fed's Tightening Inevitably Harms Markets"

▲Ray Dalio [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, predicted that the U.S. central bank, the Federal Reserve (Fed), tightening monetary policy would inevitably impact the market.

According to Bloomberg on the 21st (local time), Dalio stated at the Qatar Economic Forum, "It is easy to say that the Fed should tighten, and I also think they should do so."

However, he added, "Because asset maturities are very long, we will see a very sensitive market."

He continued, "Even if the Fed applies the brakes slightly, it will have an impact that harms the market."

He further noted, "It will be difficult for the Fed to implement tightening policies without causing significant negative effects on the market."

Earlier, on the 16th, the Fed hinted at the possibility of two interest rate hikes in 2023 through the dot plot released after the Federal Open Market Committee (FOMC) regular meeting.