Billionaire hedge fund founder Ray Dalio is once again warning about the fragile state of the U.S. economy, pointing to what he sees as the growing risks tied to excessive debt, deficit spending, and shifting monetary policy.

Dalio, who has been vocal this year about soaring U.S. debt levels, is now raising concerns that the Federal Reserve’s move toward easing interest rates could ignite a “dangerous bubble” in both financial markets and the broader economy — one that might surge before ultimately bursting.

His outlook draws from his well-known “big debt cycle” framework, which examines the long-term interplay between debt, monetary policy, and economic growth.

In his latest commentary, Dalio argued that the Fed’s dovish tilt marks the final stage of the cycle. “It would be reasonable to expect that, similar to late 1999 or 2010–2011, there would be a strong liquidity melt-up that will eventually become too risky and will have to be restrained,” he wrote.

“During that melt-up — and just before the tightening that’s enough to rein in inflation and pop the bubble — is classically the ideal time to sell,” Dalio added.