The head of the world’s largest hedge fund has said that President Donald Trump will be good for the US and world economy – but he fears the populist tide that took him to the Oval Office.
Ray Dalio, founder of Bridgewater Associates, which manages $150bn, said populism was on a scale not seen since the 1930s, and could prove dangerous.
The remarks follow a critical speech in Davos by top investor George Soros.
He called Mr Trump an “imposter” and “conman”, and expected him to fail.
Mr Dalio’s position is less negative. He told the BBC: “On Trump, there are pluses and minuses. I don’t think he is necessarily protectionist, and he is very pro-business with his policies.
“Money chases hospitable environments, and if you create an environment where the taxes are lower, for example, it can attract money from all over the place. Money moves very quickly.
“So, when those who run big companies are thinking about where they might put their next plant, they will look favourably at somewhere where there are low taxes, is pro-business, and has the rule of law.
“That’s stimulative – so the world next year will have a higher growth rate as a result of those things, I think we can be pretty confident about that.”
Less positively, Mr Dalio explained why he thought some of the forces unleashed by Trump could be “dangerous”.
“It [populism] can have negative consequences. It will have negative consequences for climate change, for globalisation.”
He said it was also the biggest threat to the future of the European Union.
“In the 1930s nearly every country, with the exception of the US and UK, had populist leaders, who became more nationalist, more protectionist, and a malaise set. When we look towards Europe we have to be mindful that this is the major force that will now determine whether there is a European Union or not.
“It frightens me because it may not be well managed. There are things that I don’t like about it, because it can lead to crises. It’s often not well managed.”
He said US stock markets had risen because of Trump’s pro-business policies – in particular lower taxes: “It’s similar from the shift from the left to the right that took place in the 1980s, which ended up being very stimulative. Where we go from here has yet to be seen.
“We know that Donald Trump is aggressive – the question is whether he is going to be aggressive and prudent, or aggressive and careless. We don’t know the answer. He has put together reasonable people around him, they don’t seem reckless.”