The stock market is not pricing in the possibility of the Federal Reserve raising interest rates to a "very harmful" level and could be in store for a sharp correction in 2023, according to billionaire investor Ray Dalio.
The Bridgewater Associates founder said Wednesday that inflation could settle somewhere around 4% or 5% – well above the Fed's preferred target of 2%. Should that happen, he warned that the U.S. central bank will have to raise interest rates to a range approaching 6%.
"The Federal Reserve will put the short-term rate up towards that level, which is very harmful, very damaging to the economy," Dalio said during an interview with Business Today.
He added, "But what the Federal Reserve is trying to do is balance those, having an interest rate that's high enough for the creditor but not so high for the debtor. And so, what you're going to see is a slowing of the pace of the rise but still approaching over 5%, probably in the vicinity of 5.5%. This will still have an effect on all markets, particularly stocks.
The S&P 500 has already plunged more than 4% this week as concerns over sky-high inflation, rising interest rates and a darkening economic outlook continue to weigh on the market. The Dow Jones Industrial Average, meanwhile, is down almost 1,000 points, while the tech-heavy Nasdaq Composite has tumbled about 5%.
Reported By Fox Business
Source: @Stocksharks
.png)
.
.
.
.
.
.
.
Tags:
stock market news, stock market, business news, stocks, market news, news station, stock market live, finance stock, us news, world news, cable news, news channel, finance news, breaking news, financial news, stock market today, share market, stock market tips, market news live, market live news, latest stock market news, market, business news today, stock market crash, share market live, dec 8 stock market news, stock market news live, news on stock market
0 Comments