NEW YORK (Reuters) – Greg Jensen, co-chief investment officer of Bridgewater Associates, the largest hedge fund in the world, is forecasting “significantly weaker, near-recession-level growth” next year.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 20, 2018. REUTERS/Brendan McDermid
In a telephone interview on Thursday, Jensen said Bridgewater is anticipating gross domestic product growth close to 1 percent in 2019 and a little bit lower for the rest of the developed world. Third-quarter U.S. GDP increased at a 3.5 percent annualized rate.
“The biggest theme developing is that you are going to have significantly weaker growth, near recession level growth in 2019, based on our measures, and the markets are generally not pricing that in,” said Jensen, who helps oversee more than $160 billion in assets.
“Although the movement has been in that direction, the degree of it is still small relative to what we are seeing in terms of the shifts in likely economic conditions. And so, we think that’s going to be the big story going forward, weaker growth and central banks struggling to move from their current tightening stance to easing and finding it difficult to ease because they have very little ammunition to ease.”
Jensen said all of this with the secular backdrop of political tensions across most of the developed world and “a cyclical downturn will just heighten those tensions and worsen de-globalization.”
In recent months, investors have been bracing for slowing economic growth. On Thursday, the Nasdaq Composite index .IXIC slumped to the brink of