At the Milken Institute’s Asia Summit in Singapore, billionaire hedge fund manager Ray Dalio outlined five key forces driving the global economy today, noting their cyclical and interconnected nature, according to a report by Lee Ying Shan for CNBC.

Speaking ahead of the U.S. Federal Reserve’s much-anticipated interest rate decision, Dalio first highlighted concerns about how the U.S. will manage its rising debt. With benchmark interest rates at their highest level in over two decades, the U.S. government now spends $1.049 trillion on debt service, a 30% year-over-year increase. Dalio questioned how this mounting debt would impact the value of U.S. assets and its role as a reliable store of wealth.

Per the CNBC report, Dalio also drew attention to what he described as “internal disorder” within the U.S., particularly the widening political divide ahead of the 2024 presidential election. He warned that these irreconcilable differences between the political right and left, exacerbated by wealth inequality, could disrupt the peaceful transfer of power. Despite Vice President Kamala Harris being seen as the frontrunner, Dalio suggested that political instability could pose a greater risk to the country’s economy than any candidate’s policies.

On the international stage, Dalio cited the escalating tensions between the U.S. and China as a significant source of concern. Dalio says that issues like Taiwan’s political status and economic tariffs have strained relations between the two superpowers. While Dalio noted that mutual fear of destruction may prevent outright conflict, he said that these geopolitical tensions are a major contributor to global disorder.

Dalio also emphasized the growing impact of environmental issues, stating that “acts of nature,” such as droughts, floods, and pandemics, have historically caused more societal disruption than wars. CNBC highlighted his warning that climate change could soon impose even greater economic costs, with global GDP expected to shrink by 12% for every one °C increase in temperature.

Lastly, Dalio underscored the transformative power of technology. He suggested that those who can effectively harness technological advancements will see significant benefits while also warning that it could deepen economic inequality. Dalio’s overall assessment was cautious, with his final remarks indicating that the global economy faces more downside risks than upside opportunities.