Bridgewater Founder Dalio: US Domestic Infighting May Intensify After Midterm Elections, Potentially Pushing Up Short-Term US Treasury Yields

According to TechFlow, on November 10, Ray Dalio, founder of Bridgewater Associates, published an article on the US midterm election results, arguing that the election will not change the core issues facing the United States, including debt, wealth and value polarization, geopolitics, climate, and technology, and that future infighting between and within political parties, as well as government dysfunction, may intensify.

Dalio noted that funding issues will surface one after another: Trump's temporary appropriations expire on December 11, the federal debt is expected to reach its limit in March 2027, and the Treasury is expected to exhaust its cash-management measures in fall 2027. He believes the related infighting could be very intense, and uncertainty may push up short-term yields on instruments such as US Treasury bills, heighten concerns about liquidity and credit risk, and weaken the status of US Treasuries as the world's primary safe collateral.

He also said that Elizabeth Warren becoming chair of the Senate Banking Committee could trigger infighting and changes affecting the economy and markets; the election results would turn Trump into a lame-duck president under attack, weaken the United States' international standing, and could lead to strategic retrenchment by the US, boosting the influence of regional powers such China.

Source: TechFlow