Skip to main content

Market Insider: The Dollar Will Tumble Once the Fed Starts to Wind Down its Rate-hike, Says the CIO of Ray Dalio's Bridgewater

June 20, 2022
Dollar Crash, Buy Gold

Article by Brian Evans in Market Insider

The US dollar will be vulnerable to a long-term bear market once the Federal Reserve starts winding down its aggressive cycle of interest rate increases, Bridgewater's co-CIO told Bloomberg TV.

The dollar recently hit a 20-year high as investors shift capital to the US to take advantage of interest rate differentials in the short term.

But its valuation now looks "extremely high," and given the size of the US current account balance, even slight changes in the flow of capital can send the dollar lower, said Greg Jensen on Thursday.

"Right now, there's still short-term pressures — bullish on the dollar," he said. "But the longer-term pressures are quite bearish. So we think you're in for a secular bear market in the dollar once you get past the current speed of the Fed tightening." 

Jensen's comments come after the Federal Reserve raised its benchmark rate by 75 basis-points last Wednesday, the highest jump since 1994. The Fed is trying to tamp down inflation, which is running at a 40-year high of 8.6% year-over-year. 

High inflation has led Bridgewater's other co-CIO, founder Ray Dalio, to warn that "cash is trash." When asked Thursday if cash is still trash, Jensen replied "on a secular basis, we think so." But compared to other financial assets like stocks and bonds, cash looks better.

"The question of how good cash will be relative to other financial assets really comes down to what central banks try to target," Jansen said. "If they actually target their inflation targets, then cash is going to be .......

To read this article in Market Insider in its entirety, click here.

Find out how Gold can bolster your portfolio!

Gold Kit

Complete this form to get more information and to receive a FREE Gold Kit.

or Call Now 800-576-9355
By clicking the below button, you agree that Lear Capital can contact you at the e-mail and telephone number provided with marketing offers. Msg. and data rates apply. Your consent to such contact is not required for purchase.
We respect your Privacy
FOX News - Lear Capital Form Fill Page pixel