By: Economic & Finance Report
Ray Dalio the head boss of Bridgewater Associates (the world’s biggest hedge fund); has indicated that inflation is staying because The Fed (Federal Reserve), is focused on speeding up raising interest rates. The interest rates have been low for too long it seems (nearly 0% interest rates) because of the pandemic.
He believes that there are numerous factors that are contributing to a prolonged date of inflation.
(a) Mr. Dalio names the current level of interest rates by The Fed. The Fed reduced rates because of the coronavirus pandemic and the hardship main street were reeking; because of high unemployment, and employees either being let go, fired or simply not returning to the workforce felt from the effects of the coronavirus pandemic.
(b) Dalio also speaks about the political tension and turmoil between political parties that is ongoing in Congress, between Democrats and Republicans; that has created an unbalanced spectrum, in a political sense to get anything done for the American people.
(c) The Great Rise of China; the Bridgewater Associates founder believes that the expansion and great rise of China has hand enormous impact on American goods, products, services and currency. It has stagnated the United States economic growth to a certain degree.
All these factors he points out is going to contribute to inflation remaining for a period a time; and its not going to go over as fast as people think it will be. -SB
Image Source: Coin Desk