Billionaire investor Ray Dalio said he doesn't expect the Federal Reserve to "cut rates a lot" and that bonds are a riskier investment given recent volatility in the Treasury market.

​Speaking at the Greenwich Economic Forum on Tuesday, Bridgewater co-founder Dalio said: "Treasuries are not a great investment choice. We have interest rate risk in the bond market."

Dalio believes investors are too optimistic about betting on a quick rate cut. The Federal Reserve cut interest rates for the first time in four years last month, lowering the federal funds rate by half a percentage point. But a strong September jobs report gives policymakers room to move at a slower pace.

The Treasury market has been volatile this year, with the 2-year Treasury yield fluctuating between 3.5% and above 5%.

Dalio pointed out that Treasuries make up a high proportion of the portfolios of institutional investors and central banks, which seems a bit overweight. He also added that geopolitical uncertainty is also a problem in the Treasury market.

"Foreign countries are worried about holding bonds because they may be sanctioned," he said.

In the wide-ranging interview, Dalio also talked about the US election and its potential impact on the market. He is optimistic about former President Donald Trump's economic policies, calling his proposal to lower corporate taxes "more classic capitalism."

​Dalio also said Trump's proposal to increase tariffs makes sense, estimating that these tariffs would increase revenue by about $800 billion a year.

​However, he also pointed out that such tariffs would bring inflationary pressure.