Dalio Says Cohn Leaving Administration Would Be `Terrible'

(Bloomberg) -- A departure of top White House economic adviser Gary Cohn would be "terrible" for the U.S. and markets, according to billionaire hedge fund manager Ray Dalio.

"If he was to leave it would be terrible," Dalio, who leads the world’s biggest hedge fund at Bridgewater Associates, said at the CNBC Institutional Investor Delivering Alpha Conference in New York. “It would undermine the future progress of economic reforms and it would also represent a challenge” for the administration in drawing talented people to top posts.

Cohn, a former Goldman Sachs Group Inc. president, has been considered for the top job at the Federal Reserve. His prospects have grown cloudy after he publicly criticized remarks the president made in the wake of racially charged violence in Charlottesville, Virginia.

Dalio, who was initially bullish on Donald Trump’s ability to stimulate the economy, has shed his optimism about the President’s agenda in recent months. In August following the Charlottesville rally, the money manager said he was “tactically reducing" risk at Bridgewater amid concerns about internal and external conflict leading to "impaired government efficiency." Earlier that month he recommended investors place as much as 10 percent of their assets in gold as a hedge against political and economic risks.

Since the beginning of 2012, Bridgewater’s Pure Alpha II has posted an annualized return of 2.5 percent, Bloomberg reported in August. It’s down 2.4 percent this year through August, according to a person familiar with the matter. The firm manages about $160 billion.

Dalio also said at the conference that lawmakers will ultimately agree on a watered-down version of Trump’s political agenda -- including tax reform, which he said could be completed next year. Instead of the 15 percent corporate tax rate envisioned by Trump, Dalio said it will be closer to 23 percent.

--With assistance from Simone Foxman and Sabrina Willmer

To contact the reporter on this story: Katia Porzecanski in New York at kporzecansk1@bloomberg.net.

To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Vincent Bielski, Katherine Burton