Ray Dalio Says Fed’s Quantitative Easing Is ‘Stimulus Into A Bubble’

Dalio’s comments come at a time when the Fed has announced that it will halt its QT program on December 1, with its balance sheet currently standing at approximately $7 trillion.

Bridgewater Associates founder Ray Dalio stated on Thursday that the Federal Reserve’s announcement to stop Quantitative Tightening (QT) and begin quantitative easing (QE) next year could be a case of the central bank providing stimulus into a bubble.

Dalio highlighted a range of factors to support his argument. This includes asset valuations being at a high and on an upward trajectory, a strong economy, above-target inflation, and abundant credit, as well as liquidity in the system.

“While I understand the Fed being highly attentive to funding-markets risk which means being inclined to prioritize market-stability over fighting inflation aggressively, especially in this political environment, at the same time, whether this becomes a full and classic stimulative QE (with big net purchases) remains to be seen.”

— Ray Dalio, founder, Bridgewater Associates

Dalio’s comments come at a time when the Fed has announced that it will halt its QT program on December 1, with its balance sheet currently standing at nearly $7 trillion.

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