Ray Dalio, who manages the world’s largest hedge fund, believes stocks will only return 4% over the next decade. But that might not be bad compared to other assets. Dalio says bond investors will do worse.

The Bridgewater Associates head made the downbeat investment projections on Tuesday at the New York Times Dealbook Conference.

Much of Dalio’s worry about the market comes from his concerns about the Federal Reserve. Dalio says the Fed did a remarkable job in pulling the economy out of the credit crisis. But at the same time he believes the Fed has made the stock market a much more risky place to be.

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“They have driven up stock prices,” says Dalio. “So what you have is a lower expected return going forward, but the same amount of risk.”

Dalio has fretted about the Fed before. So far he has been proven wrong. Stocks, as measured by the S&P 500 (SPX), are up 24% this year. Last year, at the same conference, Dalio predicted interest rates were set to rise. Yields are up, but still near historic lows.

But Dalio says the Fed is hitting the limits of what it can do to boost the economy. He says the Fed’s bond buying effort is no longer increasing economic activity. Instead he says all it’s doing is boosting stock prices and the value of other financial assets. That’s good for wealthy investors who have money in the market, but it doesn’t help the 99% much.

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Dalio’s comments mirror an op-ed in the Wall Street Journal today from former Fed official Andrew Huszar, who was hired in 2009 to help execute the Fed’s bond buying program and drive down interest rates.  He wrote that he believes that the biggest beneficiary of the program has been Wall Street.