economy
April 30, 2026
US is in stagflation, Ray Dalio says
The US economy has entered stagflation for the first time in decades amid the Iran war and Hormuz crisis, Ray Dalio has said
TL;DR
- Ray Dalio believes the US has entered stagflation for the first time in decades.
- He warns the Federal Reserve against cutting interest rates, stating it would undermine their credibility.
- The Iran war is identified as a significant factor contributing to the current economic situation and a breakdown in the global order.
- Stagflation is defined as a combination of stagnant economic growth, high inflation, and high unemployment.
- Current US inflation is at 3.3% (target 2%), real GDP grew 0.5% in Q4 2025 (down from 4.4% in Q3), and unemployment is 4.3%.
- Dalio points to rising yuan transactions, domestic political divisions, and wealth inequality as signs of a shifting world order.
- He predicts the international system is moving from rules-based governance to a 'might-is-right fighting order'.
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