Famed hedge fund manager Ray Dalio is feeling more optimistic about the U.S. economy.

The founder of Bridgewater Associates, the world’s largest hedge fund firm, wrote in LinkedIn post Wednesday evening that he has lowered his odds of the U.S. falling into a recession before the country’s next presidential election. Citing recent market weakness and the resulting gentler policy adopted by the U.S. Federal Reserve, Dalio wrote that he now believes the chances of a recession happening before the 2020 election are about 35 percent.

Previously, the co-chief investment officer and co-chairman of Bridgewater Associates believed the likelihood of a pre-election recession was greater than 50 percent.

“Starting about 18 months ago I had assessed the risk of a recession before the next presidential election to be over 50 percent because we at Bridgewater calculated that a) the growth spurt would be temporary and fade and b) the Fed’s policies in response to the growth spurt would drive asset prices and then the economy down,” Dalio wrote.

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The hedge fund firm’s bearish position helped it deliver double-digit returns last year, when the majority of hedge funds lost money. The firm’s flagship Pure Alpha strategy gained 14.6 percent net of fees in 2018, compared with the 4.6 percent loss recorded by data tracker HFR’s fund-weighted composite index.

But the coast isn’t entirely clear, Dalio warned. Although the “easier stance” taken by the Fed and other central banks has led Dalio to believe a full-blown recession is less likely, the hedge fund manager said he still expects a “significant slowing of growth in the U.S. and most other countries.”

This is because he thinks other central banks like the European Central Bank and Bank of Japan have “limited” powers to reverse economic weakness compared with the Fed, which has the power to lower interest rates and restart quantitative easing.

“When looking at the whole picture, it is more concerning,” Dalio wrote, predicting slower growth in Europe, Japan, and China, as well as generally weaker growth and inflation in emerging countries.

“I still remain worried about economic weakness coming at the same time as central banks’ powers to reverse it are limited (especially in Europe and Japan), domestic and international conflicts are great, and there will be elections in a number of countries,” Dalio concluded.