Billionaire investor Ray Dalio on Thursday sounded another alarm on soaring U.S. debt and deficits, saying it should make investors fearful of the government bond market.

“I think we should be afraid of the bond market,” Dalio said at an event for the Paley Media Council in New York. “It’s like … I’m a doctor, and I’m looking at the patient, and I’ve said, you’re having this accumulation, and I can tell you that this is very, very serious, and I can’t tell you the exact time. I would say that if we’re really looking over the next three years, to give or take a year or two, that we’re in that type of a critical, critical situation.”

The founder of Bridgewater Associates, one of the world’s largest hedge funds, has warned about the ballooning U.S. deficit for years. Recently, investors have begun demanding lower prices to buy the bonds that cover the government’s massive budget deficits, pushing up yields on the debt. Rising worries about the fiscal situation last week triggered a high-profile credit rating downgrade from Moody’s.

The yield on the 30-year Treasury yield on Thursday traded at levels not seen since 2023, around 5.14%.

Rising financing costs along with continued spending growth and declining tax receipts have combined to send deficits spiraling, pushing the national debt past the $36 trillion mark. In 2024, the government spent more on interest payments than any other outlay other than Social Security, defense and health care.

“We will have a deficit of about 6.5% of GDP — that that is more than the market can bear,” Dalio said.

Dalio said he’s not hopeful politicians would be able to reconcile their differences and lessen the country’s debt load. In a party-line vote early Thursday, House members approved legislation that lowers taxes and adds military spending. The bill — which now goes to the Senate — could increase the U.S. government’s debt by trillions and widen the deficit at a time when fears of a flare-up in inflation due higher tariffs are already weighing on bond prices and boosting yields.

“I’m not optimistic. I have to be realistic,” Dalio said. “I think it’s the essence of the challenge of our country that anything related to bipartisanship and getting over political hurdles … essentially means ‘give me more,’ which leads to these deficits.”