Here’s How Ray Dalio’s Bridgewater Is Preparing For Stagflation

Between the soaring inflation, the Federal Reserve's tightening and geopolitical tensions like the war in Ukraine, the markets have taken a severe beating this year. This environment is the total opposite of what we saw in the last decade, which was favorable for beta generally and particularly for equities.

Of course, the outlook for alpha is dim as well, and Bridgewater is concerned about the impact of the ongoing withdrawal of liquidity on assets, more so than on the economy. In a recent blog post, the Bridgewater team explained that they believe the markets are underpricing the amount of tightening that will be needed to bring inflation under control.

Q1 2022 hedge fund letters, conferences...