(Bloomberg) -- Ray Dalio, the billionaire founder of the world’s largest hedge fund, said there’s about a 25% chance of a U.S. recession this year and in 2020 and that central bankers will be limited in addressing it.
The Federal Reserve, European Central Bank and Bank of Japan “have to face the fact that when the next downturn comes there will not be the power to reverse it,” Dalio, 70, said Thursday in an interview on “The David Rubenstein Show: Peer-to-Peer Conversations.” He recommends that the Fed cut interest rates slowly, maybe by 25 basis points, without giving a time period.
Dalio’s Bridgewater Associates main hedge fund, Pure Alpha, has failed to impress this year even while his macro peers have enjoyed a rebound. The fund has lost 6% this year through Aug. 23, hurt by bearish wagers on global interest rates, Bloomberg previously reported.
Bridgewater manages about $160 billion and is based in Westport, Connecticut.