Ray Dalio of Bridgewater Associates explained the long-term debt cycle affecting the market. “The problems at the end of the long-term debt cycle,” he said, “is that it is very hard for the Federal Reserve or central banks to ease monetary policy.” He observed that the effect of quantitative easing is, ultimately, to lower the spread (or return) because it drives asset prices up and lowers the yield so, “for example, you have about a 2% bond yield.” He continued: “That means that monetary policy makes it more difficult to have credit growth or . . .monetary growth.” Further, Dalio said, “that aspect of the long-term debt cycle is the issue that means risks are asymmetric on the downside,” which he said exists “all around the world” right now. He also discussed slower growth in China, observing that the role China and the rest of the world play on each other is “negative.” Dalio expects that the Fed’s next move will be “toward a quantitative easing, not toward a tightening.” Further, he used the term “pushing on a string,” which he observed emerged in 1935: “that means there is going to need to be fiscal policy with monetary policy,” the latter of which is politically difficult. In this context, he said. “it’s important to have a balanced portfolio” if you are an average investor, although he noted the value of having an active manager who can “move quickly.”