Bbg: Dailio sez 4.5% Rate to Sink Stocks 20%

Bloomberg headline: Ray Dalio Does the Math: Rates at 4.5% Would Sink Stocks by 20%

:pushpin: He says private sector credit growth and spending to come down

:pushpin: Notes investors may be complacent about long-term inflation

β€œIt looks like interest rates will have to rise a lot (toward the higher end of the 4.5% to 6% range),” the billionaire founder of Bridgewater Associates LP wrote in a LinkedIn article dated Tuesday. β€œThis will bring private sector credit growth down, which will bring private sector spending and, hence, the economy down with it.”

A mere increase in rates to about 4.5% would lead to a nearly 20% plunge in equity prices, he added.

The rate market suggests traders have fully priced in a 75-basis-point hike next week by the Federal Reserve, with a slight chance for a full percentage point move. Traders expect the Fed fund rate to peak at about 4.4% next year, from the current range of 2.25% and 2.5%.

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