Ex-Bridgewater CIO Warns Market’s Next Big Move Could Be Driven by Just a Handful of Executives – Here’s Why

A former executive at the hedge fund founded by billionaire Ray Dalio says she’s closely monitoring the sentiment of Corporate America’s top executives as earnings season picks up speed.

In a new CNBC Television interview, ex-Bridgewater chief investment officer Rebecca Patterson says this earnings season will offer key insights into the trajectory of the US economy in the months ahead.

Patterson says that while strong bank earnings reflect the health and sentiment of US consumers, she notes that it’s now time to keep a close eye on the outlook of America’s C-suite executives.

“I’m watching more than anything else is the qualitative assessment by the executives of where we go from here. I don’t really care about the backward-looking.

I want to know: are input costs going up yet? Are they investing more or less? 

Because their sentiment will drive corporate activity over the next six months, and that’s going to be a big factor for the broader macro view.”

Patterson also believes that America will soon feel the brunt of Trump’s tariffs, as the forces that have helped to keep inflation in check begin to fade.

“I think going forward, the inventories that had helped us have been wound down. Trans-shipments helped, and that’s something the government is going to get tough on. So I do think there’s a greater chance that we’re going to see more of the tariff impact come through on prices. 

And then it’s a question: how much does a consumer bear? How much do corporates absorb? 

We don’t know what that exact mix would be, but directionally, I think the risk is that we have higher inflation in the second half of this year. That means that two Fed cuts by January are at risk.”

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