## Ray Dalio's Warning: US Fiscal Deficit and Treasury Market Impact Hedge fund manager Ray Dalio has issued a stark warning regarding the US government's fiscal trajectory. He predicts significant strain on the US Treasury market and potential capital market turmoil driven by the escalating fiscal deficit, projecting it to reach 130% of GDP within a decade. Dalio believes this increase in debt could trigger drastic measures like substantial government spending cuts, large tax increases, or increased currency issuance potentially devaluing the dollar. He emphasizes the vulnerability of the US Treasury market, the cornerstone of global capital markets, warning of negative consequences for investors and the broader economy. His analysis suggests the current path is unsustainable without intervention. To avoid significant economic pain and market upheaval, Dalio advocates for immediate attention to the fiscal deficit through a combination of spending adjustments, tax policy reforms, and careful interest rate management. The current approved tax cuts may exacerbate these challenges. ```