Cookies are disabled in your browser

This site is not viewable without cookies, and your browser currently has cookies disabled. Please enable cookies and refresh the page to properly view this site.

Bridgewater's 2020 Strategic Report:
An Economic and Markets Outlook

January 2020

Throughout history, there have been relatively long periods during which the markets and market relationships operate in a certain way — what we call “paradigms.” As we enter the 2020s, the forces that drove the recent paradigm are nearing their limits. Monetary policy has been pushed to the end of its useful life, the expected returns of assets have been squeezed to near (and, in some cases below) zero, and the levels of internal and external conflict are high and rising. Forces such as falling interest rates and corporate taxes, increased globalization and deregulation, and the shrinking power of labor, which have supported profit margins and growth for decades, are unlikely to be further supports in the future and, in many cases, are more likely to reverse. We believe we are now entering a new paradigm for markets and economies, and the shift to this new paradigm will be a big deal for policymakers and investors.

Every year, Bridgewater releases a strategic report that includes our outlook for markets and economies. Given its importance, the unfolding paradigm shift is the focus of our outlook, which covers the historical forces that brought us here, the dominant pressures that will likely define the new paradigm, and the wide range of potential outcomes for economies and markets.

As we continue to build on our deep fundamental understanding of how the economic machine works, which we have accumulated over the past 45 years, we invite you to take a step inside our research library and explore the key dynamics that we see shaping the next decade.

David McCormick

Co-CEO, Bridgewater Associates

How we Got Here

What is a paradigm shift? Co-CIO Ray Dalio sits down with Senior Portfolio Strategist Jim Haskel to explain what paradigms are and why they shift, unpack the forces that characterized the previous paradigm, and discuss why these forces are nearing their limits.

Where We Are Now

Co-CIOs Bob Prince and Greg Jensen discuss two key features of the current environment that are creating the need for a new policy paradigm: the limited effectiveness of monetary policy and rising internal and external conflict.

Where We Are Likely Headed

Co-CIO Greg Jensen and Senior Portfolio Strategist Jim Haskel discuss what the new policy paradigm might look like. While the paradigm shift carries significant risks, it also presents a significant opportunity: the opportunity for proactive fiscal policy to play a much more important role, with a likely shift to coordinated monetary and fiscal policy (“MP3”) over time.

This website uses cookies. Click here for additional details. By continuing to use this website, you consent to the use of cookies.