Bridgewater Associates, one of the world’s largest hedge funds with $92.1 billion in client assets, has issued a warning that the Trump administration’s approach to reshaping the global economy could trigger a recession. In a Wednesday newsletter, the fund’s Co-Chief Investment Officers Bob Prince, Greg Jensen, and Karen Karniol-Tambour described a “rapid shift to modern mercantilism” that will likely damage both the economy and financial markets.
The warning comes as markets have already shown negative reactions to Trump’s tariff policies, with the S&P 500 down 8.3% year-to-date and 5.2% since the April 2 announcement of “reciprocal tariffs.” U.S. bonds and the dollar have also declined, potentially signaling that foreign investors are retreating from U.S. markets.