Dalio Says Monetary Policy Might Not Be As Effective Going Forward

As the interest rate cycle bounces near zero, Bridgewater Associates Ray Dalio expressed concerns that monetary policy might not be as effective in the future.

Speaking at a New York Times Dealbook conference, Dalio said the dynamic upon which capitalism is based on will become “decreasingly effective” and this will result in “a big difference in the world economy.”

Ray Dalio on the effectiveness of monetary policy

“We have zero interest rates and zero (very tight) credit spreads,” he said. “What this means is the effectiveness of monetary policy going forward will less. In a year or two, if we need to ease monetary policy the effective ability to do this will be limited.”  Dalio particularly worries...