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Bridgewater’s Dalio says would be ‘terrible’ for markets if Cohn left White House

Trump senior adviser Kellyanne Conway and Trump's economic adviser Gary Cohn speak before observing a moment of silence in remembrance of those lost in the 9/11 attacks at the White House in Washington on Sept. 11.

Kevin Lamarque/Reuters

Billionaire hedge fund manager Ray Dalio on Tuesday threw his weight behind President Donald Trump's top economic adviser, saying it would be "terrible" if Gary Cohn were to leave the Trump administration.

"It would be bad for the market," Mr. Dalio said at the CNBC Institutional Investor Delivering Alpha Conference of Cohn, who is chairman of the National Economic Council.

"If he was to leave, it would be terrible," Mr. Dalio said, citing two reasons.

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The optics would be negative, Mr. Dalio noted, saying a Cohn departure would undermine the progress of future reforms and make it tougher to recruit people to work for the Trump administration.

Mr. Cohn, who left his position as president of Goldman Sachs Group Inc to join the Trump administration, recently considered leaving but then decided to stick with the president, people familiar with his thinking have said.

Mr. Trump has said Mr. Cohn was on a short list of possible candidates to succeed Janet Yellen as Federal Reserve chair. Mr. Dalio declined to say specifically whether Mr. Cohn would be a good Fed chair but called him a "very capable man" who has the skills to talk to many people and form consensus.

Mr. Cohn's future has captivated both Washington and Wall Street, with markets reacting negatively to speculation earlier in the summer that he might leave. Last week, the Wall Street Journal reported that Trump was unlikely to nominate Mr. Cohn as Fed chair. Sources told Reuters that Cohn was still involved in the process of selecting the Fed chair to possibly replace Ms. Yellen when her first term expires early next year.

As one of the world's most powerful investors, Mr. Dalio also discussed financial markets and the kind of investments all people should have. To hedge against risk, Mr. Dalio said gold is great bet, noting that people should have between 5 per cent and 10 per cent of their portfolio assets invested in the metal.

He also said that economic growth would likely be between 2.5 per cent and 3 per cent per year, relatively subdued growth because of political uncertainty around signature economic reforms.

Mr. Dalio also said the economy is "highly burdened" with obligations such as debt, pension payments and healthcare costs.

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