![\"Bridgewater](\"https:\/\/www.cryptocabaret.com\/wp-content\/uploads\/2023\/02\/bridgewater-associates-recession-768x432.jpg\")
<\/p>\n<\/p>\n
Bridgewater Associates\u2019 co-chief investment officer has warned about a recession that is \u201cmuch more difficult\u201d and \u201cmuch more painful\u201d than what we\u2019ve been accustomed to. \u201cThe dam has been broken where fiscal policymakers are now part of the story,\u201d said the executive of the world\u2019s largest hedge fund.<\/strong><\/p>\n Karen Karniol-Tambour, Bridgewater Associates\u2019 co-chief investment officer, warned about recessions that are very different from previous times in an interview with Bloomberg last week. Founded by billionaire Ray Dalio, Bridgewater Associates is the world\u2019s largest hedge fund, with about $130 billion in assets under management.<\/p>\n When asked about the next big risk she sees coming over five to 10 years, Karniol-Tambour replied:<\/p>\n The next big risk is recessions that are deeper and longer than what we\u2019ve been accustomed to.<\/p>\n<\/blockquote>\n In previous economic downturns, \u201ccentral banks could just hop right in and reverse it,\u201d she noted, adding that when central banks just eased everything, recessions were \u201cquick and shallow,\u201d not \u201cdeep and long.\u201d<\/p>\n She explained that the Covid pandemic was a turning point because for the first time fiscal policymakers got \u201cdeeply involved in solving the problem.\u201d In addition to central banks printing money, \u201cpolicymakers basically come in and direct the money to people,\u201d she said, elaborating:<\/p>\n So to me, the dam has been broken where fiscal policymakers are now part of the story \u2026 They\u2019re much more likely to step in with big fiscal expansions.<\/p>\n<\/blockquote>\n \u201cMonetary policy on the one hand will be less important because fiscal will be doing what it\u2019s doing,\u201d she described. \u201cOn the other hand, they\u2019re going to be in an even tougher spot because they\u2019ll have much more entrenched inflation because of secular inflationary pressures and fiscal policymakers stimulating at the same time.\u201d The Bridgewater executive continued:<\/p>\n So they\u2019ll be forced to tighten a lot more than they would\u2019ve otherwise wanted \u2014 or ease a lot less. Those become recessions that are much more difficult, much more painful.<\/p>\n<\/blockquote>\n \u201cWe\u2019re in a place where to solve a lot of our most important problems, you can\u2019t only rely on market forces, you need political forces to work as well,\u201d she stressed, noting that the risks are \u201cexacerbated by how fast the pace of de-globalization is going to be.\u201d<\/p>\n Karniol-Tambour opined:<\/p>\n The biggest wild card here, of course, is how difficult the relationship gets with China, because China\u2019s so deeply embedded in supply chains.<\/p>\n<\/blockquote>\n \u201cThere\u2019s a big difference between having to modestly cut them out or actually decoupling from China. That could be a very inflationary event that exacerbates this whole environment significantly,\u201d the executive concluded.<\/p>\n In December last year, Blackrock, the world\u2019s largest asset manager, similarly stated<\/a> that we are heading into a recession that is \u201cthe opposite of past recessions,\u201d noting that the \u201cpolitics of recession\u201d will take over. Mad Money\u2019s Jim Cramer said the market has already decided<\/a> that a recession is coming. U.S. President Joe Biden, however, said last week that he does not see the U.S. economy sliding into a recession this year or next.<\/p>\nBridgewater Executive\u2019s Recession Warning<\/h2>\n
\n
\n
\n
\n