Ray Dalio, the hedge fund veteran who recently handed over control of Bridgewater Associates – one of the world's biggest hedge funds – to a "new generation" of investors, believes a 'perfect storm' is brewing for the economy, according to a report by Reuters.

Dalio remains a "meaningful owner" of the firm and has forecast 'real' economic pain as the US Federal Reserve battles to control inflation. 

Speaking at the Greenwich Economic Forum this week, Dalio said 
he expects the US economy to take a "giant lurch backward". And the trigger could be interest rates hitting 4.5%. 

"I don't know whether that's 4.5%, or the economy could not take an interest rate much higher than that before it's going to be negative," he said.