Trump Ally Bessent Says Stocks Will Fall on ‘Precarious’ Economy
- Hedge fund manager told clients that volatility will continue
- His Key Square fund is betting on natural gas and Japan
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Scott Bessent, who runs macro hedge fund Key Square Capital Management, said he expects a jump in volatility and a decline in US markets because the economy is more fragile than most investors realize.
“Right now we view the US economy as being in a precarious, emerging market-style equilibrium,” Bessent told clients in a letter earlier this month. The government’s large deficit and debt issuance using shorter-term instruments have fueled asset bubbles in stocks and real estate, he wrote, adding that “every emerging market exhibiting these characteristics, especially during an election cycle, has experienced a downside economic shock.”