By Carolina Mandl

NEW YORK (Reuters) – Hedge fund Bridgewater Associates stated that the independence of the Federal Reserve is likely a critical issue in the U.S. presidential election, according to a commentary sent to clients on Tuesday and reviewed by Reuters.

The remarks from one of the world’s largest hedge funds, which managed about $100 billion in assets as of August, amplify concerns shared by other investors regarding Fed independence. The Fed's independence is vital for investors, as any political interference in monetary policy could undermine essential forecasts on inflation and economic growth both in the U.S. and globally.

Founded by renowned investor Ray Dalio, Bridgewater actively speculates on various securities—including stocks, bonds, commodities, and currencies—based on predicted macroeconomic trends.

"Probably maybe most structurally important, is Fed independence and what this will do to the nimbleness of policymakers in the U.S.," co-chief investment officer Greg Jensen remarked regarding potential policy shifts following the election.

Republican nominee Donald Trump has occasionally expressed a desire to influence Fed policy, asserting that the U.S. president should have a say in interest rate decisions. Last week, Trump somewhat retracted earlier remarks, claiming he would have the right as president to advise the Fed on interest rates, although he would not mandate a change.

"Trump has often suggested he would be a better central banker than the central banks. The pressure on U.S. institutions is mounting from both ends, particularly as Trump asserts that he believes the Fed should not have as much independence from a capable executive like himself," Jensen noted.

Trump's campaign did not respond immediately to Reuters' request for comment regarding Bridgewater's insights to investors.

In stark contrast, Democratic nominee Kamala Harris has vowed not to interfere with the central bank if she wins the presidential election on Nov. 5.

While discussing his investment perspective, Jensen mentioned he is not positioning himself on the election due to its competitiveness between Trump and Harris, and the uncertainty surrounding a possible Republican or Democratic sweep.

"Post-election, we think there are significant opportunities for us," Jensen indicated.

A Reuters/Ipsos poll from Monday showed Harris with a slight lead of 46% to 43% over Trump, similar to her advantage in a poll from the previous week (45% to 42%). However, prediction markets suggest that Trump's odds appear higher.

Jensen remarked that both outcomes remain "very live" at this moment and could lead to "radically different policies," including related to immigration, tariffs, geopolitical relations, and regulation.

He identified the two largest risks for the U.S. economy currently as the election and the pricing of financial assets like bonds and equities, noting, "there’s very little room for error."

Some hedge funds have become more vocal regarding their predictions.

Billionaire hedge fund manager Daniel Loeb mentioned that he has recently adjusted Third Point's portfolio to capitalize on a potential surge in corporate activity post-election, predicting that Trump is more likely to prevail.

JPMorgan also stated in a recent note that global hedge funds have exhibited "a strong preference" for stocks that may perform favorably should Trump win the election.