Ray Dalio's Bond Shake-Up Scenario

Ray Dalio thinks bond markets are on the brink of a significant shake-up.

Dalio, the billionaire investor who created Bridgewater Associates, wrote in a Linkedin.com post on Tuesday that "there's a significant likelihood that we have made the 30-year top in bond prices." When these extreme moves happen, some investors will be shaken out of their positions, "making the move self-reinforcing" for a while, he wrote.

Dalio seems to be predicting a prolonged and potentially messy bond-market selloff. He isn't the first big investor to call a top for debt markets that have been inflated by central bank policies. But his comments have particular resonance. Many traders are starting to price in higher inflation rates, and bondholders have just experienced the worst selloff in years.