The legendary economist John Maynard Keynes, a billionaire investor and founder of Bridgewater Associates, has quoted legendary economist Ray Dalio as saying what he feels about cash as an asset in the current economic environment.
John Maynard Keynes is credited with saying, "When the facts change, I change my mind." The facts have changed along these lines and I have changed my mind about cash as an asset: I no longer think cash is trash, Dalio said in his tweet.
He explained that the short-term interest rate is now about right with the Fed shrinking the balance sheet, and that it is now about neutral. In May 2022, Dalio indicated he did not believe in cash. Cash is still trash, he said. According to Markets Insider, the investor said in an interview with CNBC at the World Economic Forum.
Benzinga's take: The U.S. Fed has been aggressively hiking its policy rates this year to counter inflation. The yield on short-term treasury bills is close to 3.9% because of the higher interest rates. At a time when all assets such as stocks, commodities and bonds are getting hammered, holding cash or investing in risk-free treasury bills may not be a bad idea.
Price Action: The iShares Treasury Floating Rate Bond ETF TFLO has gained 0.32% since the beginning of 2022, while the WisdomTree Floating Rate Treasury Fund USFR has gained 0.22% in the same period.
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