Global markets are facing a new phase of uncertainty following recent signals from US President Donald Trump regarding possible tariff measures. Ray Dalio, founder of Bridgewater Associates, warned against these developments, saying they make the trajectory of U.S. economic policy increasingly difficult to anticipate.
In brief
- Ray Dalio warns that Trump's tariff signals are shaking global markets, while changing central bank policies are adding to tensions within the monetary system.
- It highlights gold as a key hedge, having outperformed other asset classes and providing a form of stability in times of high volatility.
- Potential Trump tariffs could push some countries to reduce their exposure to U.S. assets and alter global capital flows.
Central bank pressures and currency risks
At the World Economic Forum in Davos, Dalio highlighted rising tensions within the international monetary system. He explained that central banks are increasingly adjusting their management of traditional currencies, creating friction between those who hold cash and those who rely on it. According to him, this dynamic involves long-term structural risks, in a context where public debt like national currencies are less and less perceived as fully reliable stores of value.
Dalio designated gold as a major strategic hedgerecalling that it has outperformed technology assets over the past year. He added that the precious metal tends to do well when other asset classes are under pressure, and could make up between 5% and 15% of a typical portfolio. Gold recently hit a new all-time high of $4,850 an ounce, gaining $260 in just 48 hours, illustrating its appeal in times of financial uncertainty.
Trump Tariffs, Market Risks and Political Uncertainty
Dalio's statements come after President Trump's warnings of possible tariffs targeting some European nations, a stance reinforced by disputes over Greenland. Trump indicated that new tariff measures could target countries that challenged his comments questioning Denmark's control over the territory.
These announcements have reignited fears of trade frictions, pushing investors to reassess their exposure to US assets and influencing financial markets as a whole. Dalio recalled that, in the past, similar tensions had gone beyond trade to affect both capital flows and currency behavior. In times of international conflict, he added, even allied countries may avoid each other's sovereign bonds and turn to currencies deemed more stable.
Dalio had already indicated in December that Trump's economic and regulatory policies, including those related to digital assets, could face obstacles in the 2026 midterm elections, and be called into question in 2028 if Democrats regain control of Congress. In addition, Trump is scheduled to attend the World Economic Forum in Davos this week to speak with other international leaders.
The forum also brings together leaders from the cryptocurrency sector. Coinbase CEO Brian Armstrong has confirmed plans to meet with banking officials to review the Digital Asset Market Structure bill in the US Senate. This text aims to establish a clearer regulatory framework for the crypto industry, but its progress has been hampered by debates around stablecoin yields. The current version of the project seeks in particular to limit these rewards for customers.
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