The US is transforming into a 1930s-style autocracy, says billionaire Ray Dalio

By Olesya Dmitracova, CNN

London (CNN) — The United States is sliding into 1930s-style autocratic politics, billionaire Ray Dalio has warned.

“I think that what is happening now politically and socially is analogous to what happened around the world in the 1930-40 period,” the founder of Bridgewater Associates, one of the world’s largest hedge funds, has told the Financial Times.

State intervention in the private sector, such as the Trump administration’s recent decision to take a 10% stake in struggling chipmaker Intel, is the sort of “strong autocratic leadership that sprang out of the desire to take control of the financial and economic situation,” Dalio said in a wide-ranging interview published Tuesday.

Dalio has frequently criticized Trump’s policies. In June, Dalio opposed Trump’s domestic policy agenda known as the “One Big Beautiful Bill Act,” arguing that America’s debt was nearing a critical point that could threaten the stability of the world’s largest economy.

In his interview with the FT, Dalio noted that gaps in wealth and values, as well as a collapse in trust are driving “more extreme” policies in the US, arguing that during such times “most people are silent because they are afraid of retaliation if they criticize.”

“Classically, increased wealth and value gaps lead to increased populism of the right and populism of the left and irreconcilable differences between them that can’t be resolved through the democratic process. So democracies weaken and more autocratic leadership increases as a large percentage of the population wants government leaders to get control of the system to make things work well for them,” Dalio said.

He also warned of dangers of the Federal Reserve losing its independence. If the central bank yields to political pressure to keep interest rates low, that “would undermine the confidence in the Fed defending the value of money and make holding dollar-denominated debt assets less attractive.”

International investors have already started shifting out of Treasuries into gold, he noted.

For months, the Fed has been under an unprecedented attack from President Donald Trump for keeping borrowing costs high as it worked to fight inflation. Trump is also attempting to fire governor Lisa Cook.

Dalio’s comments on the Fed’s independence follow a warning from Europe’s top central banker that, if Trump managed to influence the Fed’s decisions on interest rates, that would present “a very serious danger” to the American economy and beyond.

If US monetary policy were no longer independent and “depended on the dictates of this or that person, then I believe the equilibrium of the American economy … would be very worrying, European Central Bank president Christine Lagarde said in a radio interview aired Monday, noting that the effects would also be felt worldwide since the US economy is the largest in the world.

CNN has contacted the White House for comment on Dalio’s remarks.

Ryan Hogg contributed reporting.

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