While Ms Yellen, the US Treasury secretary, also appeared confident that inflation would fall, Ray Dalio, founder of Bridgewater Associates, the world's largest hedge fund, warned that high inflation would persist and the economy worsen.

On Wednesday, June 7, Dalio said at a media event that inflation in the United States will remain high and real interest rates will rise. He says:

"We are at the beginning of a late-stage, big-cycle debt crisis, when too much debt is created and buyers are scarce."

Dalio doesn't think interest rates will rise much higher than they are now, but the U.S. economy will deteriorate, which could lead to more internal conflict if the country is politically divided by then.

In recent months, Dalio has repeatedly warned about the risks of debt.

At a private equity summit in China in April, Mr. Dalio said the world was on a perilous edge and could face three painful, seismic upheavals that could change the order at home and abroad like we have never seen in our lifetimes but have happened many times in history.

These three upheavals are:

Monetisation of huge debts. Central banks buy this debt by printing money and issuing money, and that's what we're seeing now in the financial system.

The greatest divide in wealth and values that we have seen in our lifetimes, a huge internal conflict.

Conflict between world powers.

Dalio points out that all three of these forces are now at their largest levels since 1930-1945.

Dalio was talking about big cycles. He explained that many times, many short periods accumulate to form a large long period. Over the course of this cycle, the debt ratio rises, and too much debt leads to debt write-downs and huge debt monetization. Financial and economic cycles are accompanied by political cycles within countries and geopolitical cycles between countries. That's because economics and politics interact.

History, Dalio says, shows that these three forces, when combined, can lead to turbulent periods of transition, leading to huge upheavals in the domestic and world order.

Last month, Dalio predicted 'very big changes' over the next two or three years. Because the United States has a debt problem, which will weaken economic growth, at the same time, there is a political election year coming up, and there are major international conflicts. In addition, AI will certainly have an impact during this time period. They will change in important and shocking ways.

Dalio said that in the next two to five years, we will move from one reality to a very different one. This stems from five forces: the debt problem, internal politics, external geopolitics, the behavior of nature, and the technological changes that are changing the way we think, and the result will be a very different world five years from now.