Ray Dalio’s Bridgewater predicts another 20% to 25% drop for the markets. The Fed’s aggressive rate hikes have cast a giant shadow over the stock market. Among the experts who are sounding the alarm is Ray Dalio, founder of the world’s largest hedge fund Bridgewater Associates.

Dalio warns that Fed’s tightening could lead to stagflation – an economic condition marked by high inflation, but without the robust economic growth and employment that usually come with it. “Over the long run the Fed will most likely chart a middle course that will take the form of stagflation.” And recently, Bridgewater’s co-chief investment officer Greg Jensen told Bloomberg that the Fed’s hawkish stance still hasn’t been fully priced in.

“In aggregate, let's say asset markets decline at something like 20% to 25%,” he predicts.