In a time of strife and anxiety, the nation has turned its lonely eyes to hedge Ray Dalio. And the head of the world’s largest hedge fund Bridgewater has answered the pleading gaze with – what else – a LinkedIn post.
Dalio’s “Reflections on the Trump Presidency” shows the CEO tentatively upbeat on the coming Trump economy, predicting higher growth amid rising inflation and bond yields as the Trump administration invests in infrastructure, slashes taxes and ditches Obama-era regulations. All in all, Dalio sees “one of those major reversals that last[s] a decade” in store for the economy.
But that’s not to say Dalio has any great feeling on the matter either way.
“We are more non-ideological and practical/mechanical because to us economies and markets work like machines and our job is simply to understand how the levers will be moved and what outcome the moving of them is likely to produce,” he wrote. Because that's what transcendental meditation is all about after all: dispassionate appraisal of the economic machine.
The post is as much a treatise on Trumpian economics as it is an assessment of his administration’s sanity, which got a solid not-crazy grade from Ray – who believes strongly in telling people what's what. “There’s a good chance that the ‘craziness’ factor will be smaller and play a lesser role in driving outcomes than many had feared,” Dalio said, citing nothing in particular other than a vague mention of “feedback that we are getting from various sources.”
To rout out any lingering concern you might have, Dalio added: “They probably won’t recklessly and stupidly drive the economy into a ditch.” Though keep in mind, that’s Dalio’s “very preliminary read of the situation, which is too premature to take to the bank.”
The extended metaphor that Dalio hints at throughout is that the economy is a car, with Trump and his administration at the steering wheel. “The straws in the wind suggest that many of the people under consideration have a sufficient understanding of how the economic machine works,” Dalio said, without naming names. He sees Trump turning right, but capably so, without sudden veers – all the while jamming down on the gas pedal with tax cuts and deregulation.