Rates aren’t done yet
Ray Dalio’s latest take is basically: don’t assume the pain is over just because markets got the memo. The Bridgewater founder says tighter policy is the classic way economies slow down, and that rates can still rise further before things are actually restrained.
What that means for your portfolio
If you’re holding rate-sensitive names, this is the kind of backdrop that can keep them sweaty. Think: expensive growth stocks, levered balance sheets, and anything that needs cheap money to keep the party going.
The AI spending side quest
Dalio also flagged a risk in AI where people stop separating a good technology from a good investment. Translation: just because something is cool doesn’t mean every company borrowing money to chase it is going to win.
Big picture
This isn’t a panic button, but it is a reminder that policy can stay restrictive longer than the market wants to admit. And when rates are still the boss, valuations suddenly have to do a lot less daydreaming and a lot more math.