Ray Dalio says a recession is likely—but not a normal one: ‘We are changing the monetary order’

• President Donald Trump announced a 90-day grace period for some tariffs after a sell-off in the bond market. But investors are still dumping bonds and the 10-year Treasury yield is leaping, fueling doubts over the asset’s long-held safe haven status.

President Donald Trump pressing pause on his sweeping reciprocal tariffs that sent stocks spiraling and ensued chaos in the bond market doesn’t appear to be much of a comfort for some. Ray Dalio, Bridgewater Associates founder, still sees a recession as a possibility. 

“I think it’s likely that we’re going to be in a recession,” Dalio said on Bloomberg Television Thursday, a day after Trump announced the 90-day grace period to negotiate trade deals via his social media platform. Still, while Trump put so-called reciprocal tariffs on ice, he placed a 10% blanket tax on other countries and duties on China. 

A recession is a prolonged period of negative economic growth—or two consecutive quarters of negative gross domestic product, technically speaking. Dalio said that is probable, but his concern extends beyond that. 

“I’m more worried about the greater dynamic of these conflicts,” he said. “I’m worried about more serious issues…the financial, the political, and the geopolitical.” 

These factors feed on themselves, Dalio said. China-U.S. tensions are escalating. Trump placed a 145% tariff on China, and China retaliated with a 125% tariff. The trade war has begun. After Trump’s tariff declaration on Wednesday, Moody’s Chief Economist, Mark Zandi, told Fortune “trade between the U.S. and China threatens to all but shut down,” and that a recession is likely. 

Even so, “this is not a normal recession kind of situation,” Dalio said. “We are changing the monetary order.” Dalio is referring to the sharp sell-off in the bond market, a fallout from Trump tariffs. Bonds have been a safe-haven asset, but investors are dumping them along with stocks, putting their status in question. 

It’s been floated that pain in the bond market was what pushed the president to press pause on his tariffs, especially where the 10-year Treasury is concerned, since the stock market spiraled for days before. 

“It seems we found the strike price of the Trump put, but the trigger was Treasury yields rather than the stock market,” Bank of America analysts wrote in a research note released Friday.

Still, where there was some relief in the stock market, there was no relief for the bond market. The bond sell-off continued, and the 10-year Treasury kept leaping. Bank of America analysts said a slowdown looks more likely than a recession, which other market watchers have predicted, too. Jeremy Siegel, emeritus professor of finance at the University of Pennsylvania’s Wharton School, recently said maybe a recession is off the table, but a slowdown isn’t.

This story was originally featured on Fortune.com