US entering ‘particularly risky period’ amid rising debt, deficits: Veteran investor Ray Dalio

New Delhi, June 18 (IANS) US hedge fund billionaire Ray Dalio has warned that the United States is entering a “particularly risky period between the 2026 midterm elections and the 2028 presidential election,” due to widening fiscal deficits, rising debt and falling demand for US government bonds.

“I believe we are currently on the brink,” Dalio wrote on X, adding that the monetary situation was “becoming increasingly threatening.” Dalio said the US currently spends about $7 trillion a year while its revenue is roughly $5 trillion, resulting in a scenario of “40 per cent overspending.”

The Bridgewater Associates founder said that Washington has substantial debt to finance but “the demand for that debt is falling,” because of “standard supply and demand factors, as well as fears from debt holders regarding potential sanctions.”

Dalio has repeatedly flagged the 2026–28 window as very risky, warning that the country’s fiscal trajectory could force unconventional policy responses and forecasted a two-year timeline on when the fiscal pressure could peak.

In an early June event, he reportedly escalated his warnings, saying the US has moved “past the point of no return” on its debt trajectory. He suggested a 1930s-style policy of financial repression — in which the Fed and Treasury coordinate to suppress yields — was now a plausible outcome, multiple reports said.

The annual interest on the US national debt is projected by the Congressional Budget Office to cross $1 trillion in 2026, with the total national debt currently at nearly $39.2 trillion, up from about $28.5 trillion just five years ago.

Ray had in 2025 said that the US is in a conflict with China and its allies, which will determine the future of the world.

“The US and China are in a technology competition. The others are not really in the game. The winner of the technology war will win all wars, including economic war and geopolitical war,” said Dalio.

—IANS

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