Billionaire Ray Dalio says that investors should keep an eye on one benchmark -indicator in the midst of macro -economic uncertainty.
In a new thread on the social media platform X, hedge fund manager Ray Dalio out If the Federal Reserve would lower too much, this could lead to further economic hardships and that traders should follow the revenue curve of the FED.
According to Dalio, a combination of long rates can rise, the dollar that falls in value and can cause an increase in gold problems.
“The FED is in a very difficult position because he tries to balance the benefits of reducing interest rates when maintaining the value of money. At the moment there is a lot of uncertainty throughout the economy, along with a decline in sentiment.
Combine that with political pressure and the reality of our upcoming payments for debt services, and you have this value of money conflicts. So changes in monetary policy – especially if the cut is too aggressive – can lead to a period of great concern.
My advice: View the yield curve. If you see long rates rising in addition to downward movement in the dollar and rising in gold, you know that there is a movement from bonds. Because the value of money matters a lot. ”
The revenue curve is a graph that shows the interest rates (yields) of American treasury effects over different maturities, from short -term accounts to long -term bonds. It reflects market expectations about future interest rates and economic conditions and is closely followed by the Federal Reserve and Market participants.
Earlier this week, Dalio warned against trading the most popular meme shares because they undoubtedly cross out.
“These memes are usually due to a mix of extrapolating what happened before and emotional considerations. Also, most investors usually do not take market prices into account.
In other words, they tend to identify what a great investment has been (for example a strong performing company) as great, and they do not pay enough attention to prices, although the prices (whether it is cheap or expensive) is the most important thing. “
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Generated image: midjourney