While markets look for signs of when the Federal Reserve will tighten monetary policy, hedge fund manager Ray Dalio believes the central bank could resort to easing.
The Fed could loosen monetary policy through quantitative easing rather than tightening, the Bridgewater Associates founder said in a client note. He highlighted that risks of deflationary contraction are increasing relative to risks of inflationary expansion.
Signs of an improving U.S. economy had buoyed chances the central bank would hike interest rates this year. But amid slowing global growth, pressures on inflation and rocky stock markets, many market watchers have delayed their expectations for the Fed to tighten.