Market Watch: Ray Dalio Says Watch Out for Rates Reaching This Level, Because Wall Street Stocks Will Take a 20% Hit

Article by Barbara Kollmeyer in Market Watch

After that CPI shock earlier in the week, Wall Street is fielding a fresh batch of data on Thursday, with the headline retail sales number coming in stronger than expected. And a disastrous rail strike may be inverted.

But there’s no cheering up billionaire investor and hedge-fund manager Ray Dalio who asserts the Fed has no choice but to keep driving up interest rates, at a high price to stocks.

And he’s putting some fairly precise guesswork out there. “I estimate that a rise in rates from where they are to about 4.5% will produce about a 20% negative impact on equity prices,” Dalio said.

As for what happens when people start losing money in the markets — the so-called “wealth effect” — he expects ......

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