The next downturn in global growth is a daunting prospect for financial markets, according to the billionaire founder of the world's largest hedge fund.
Comments by Bridgewater Associates' Ray Dalio on Tuesday come at a time when investors are increasingly concerned about a serious global economic slowdown, with a long-running U.S.-Sino trade war souring business and consumer sentiment.
"What scares me the most longer term is that we have limitations to monetary policy — which is our most valuable tool — at the same as we have greater political and social antagonism," Dalio said during a panel discussion at the World Economic Forum Davos, Switzerland.
"So, the next downturn in the economy worries me the most," he added.
A rise of populism is also a pressing concern for market participants, with nationalist and far-right parties making significant electoral gains worldwide in recent months.
In addition to the ongoing trade dispute, Dalio said these types of political issues bear a striking resemblance to market conditions during the final years of the Great Depression in the late 1930s.
"These types of political issues are now very connected to economic issues. So I think that's the character of the environment that we are in," Dalio said.
In an interview with CNBC later Tuesday, Dalio warned of a "significant risk" of a U.S. recession in 2020.
