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Ray Dalio: The Next Big Fed Move Will Be QE, Not A Rate Hike

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While most of the rest of the world is debating “when” rather than “if” an FOMC rate hike is coming, Bridgewater Associates founder Ray Dalio sees a much more troubling scenario unfolding.

According to Dalio, the next major move by the Federal Reserve will be easing rather than tightening, and the Fed may be ill-equipped to combat the coming end of a secular debt-powered global economic supercycle.

Classical Economic Cycles

The typical classical economic cycle revolves around the spread between short-term interest rates and the returns that can be generated from longer-term investments such as stocks. “Because short-term interest rates are normally below the rates of return of longer-term assets, you’d...