Famous investor predicts sharp decline in stocks

Billionaire investor Ray Dalio predicted a hard landing scenario and a major decline in stocks. Following the inflation that exceeded expectations in the US, famous investor Ray Dalio made quite pessimistic predictions about the US economy and stocks. The founder of Bridgewater Associates LP, in his Linkedin post, drew attention to the fact that interest rates should rise to very high levels in the range of 4.5-6 percent and said, “This will reduce the size of private sector loans, and therefore private sector spending and the economy.” Dalio predicted that if interest rates rise to 4.5 percent, stocks will lose approximately 20 percent from their current levels. According to pricing in the swap market, the Fed’s peak interest rate will be reached next year at 4.4 percent. Dalio also announced that he is pessimistic about long-term inflation. Noting that an average inflation expectation of 2.6 percent is priced in the bond market for the next 10 years, Dalio stated that his expectation is between 4.5-5 percent and that much higher inflation will be seen in the event of economic shocks. There are also optimistic predictions But there are also investors who disagree with Dalio. According to Carlyle Group Inc. co-founder David Rubenstein, the sell-off in stocks following the CPI data is a great opportunity to buy. “Really talented investors are buying the dip in the market right now,” Rubenstein told Bloomberg TV.