Billionaire hedge fund manager Ray Dalio has raised serious concerns about the U.S. economy, warning that Donald Trump’s aggressive trade policies could lead to economic trouble far worse than a typical recession.
Speaking on NBC’s Meet the Press this Sunday, Dalio, the 75-year-old founder of Bridgewater Associates, said the U.S. is “very close to a recession” but emphasized that the risks go beyond that.
“I think we’re at a major decision point,” Dalio said. “A recession usually means two quarters of negative GDP growth—we’ve seen those before. But what we’re facing now could be much more serious.
We’re seeing signs of a breakdown in the global monetary system. We’re spending more than we can sustain. That’s a warning sign.”
Dalio’s comments come amid market turmoil caused by President Trump’s new round of tariffs, which include a dramatic 145% hike on imports from China.
These moves have shaken global stock markets, and economists are worried about the broader consequences.
The billionaire investor pointed to major shifts happening both in the U.S. and globally. “We’re experiencing profound changes in our domestic systems and the world order,” he said, drawing comparisons to the 1930s—a decade marked by economic depression and geopolitical upheaval.
Dalio explained that when you combine rising debt, trade wars, and global power struggles, the result is usually a major disruption to the current economic and political systems.
“We’ve seen this play out in history,” he warned. “How we handle these changes now will determine whether we fall into a severe crisis or manage to avoid it.”
Known for accurately predicting the 2008 financial crisis, Dalio said the U.S. budget deficit is a critical issue. “If we could bring the deficit down to 3% of GDP, we’d be in a much safer place. But right now, we’re heading toward 7% if nothing changes,” he cautioned.
He urged lawmakers to commit to a “3% pledge,” a call for fiscal responsibility to avoid a future debt crisis. Without that, Dalio warned, the imbalance between debt supply and demand could cause lasting economic damage. “It won’t be just a typical recession—it could be worse.”
When asked whether he thinks Trump’s tariffs are making the situation more complicated, Dalio acknowledged that there’s value in rebuilding U.S. manufacturing and creating jobs.
However, he stressed that the approach matters just as much as the goal.
“If it’s done with thoughtful negotiation and stability, it can be positive,” he said. “But if it’s done in a chaotic and disruptive way, it risks harming the very economy we’re trying to protect.”
Although Trump recently announced a 90-day freeze on most tariffs, keeping them at 10% on all imports except those from China, financial experts believe the economic damage may already be done. Many are now warning about a growing trend of “de-dollarisation,” where global economies begin moving away from relying on the U.S. dollar due to instability.
Dalio’s message was clear: the U.S. must act with urgency and strategy if it wants to avoid a deeper crisis. “We’re at a juncture,” he said. “Handle this right, and we can manage it. Handle it poorly, and we could be facing something much worse than a recession.”