Billionaire investor Paul Tudor Jones called the current geopolitical environment the “most threatening and challenging” he’s ever seen in the wake of Hamas’s attack on Israel over the weekend and predicted the US will enter into a recession early next year.

“Where this really gets bad is obviously if Iran and Israel get into direct conflict, because then you’ve got the ability to have kind of a First World War cascade, where everyone gets involved,” Jones, founder of Tudor Investment Corp., said in an interview Tuesday on CNBC. 

He added that the big question now is if Hamas was a proxy for Iran or was it simply an ally.

Jones predicted a recession will start in the first quarter of 2024, saying the US is in its weakest fiscal position since World War II. The country needs to find $1 trillion in savings by 2025 and should raise taxes and cut spending, he said.

“The bond market, simply through supply and demand, is going to deliver more rate hikes, because we don’t have a clearing price yet for long-term debt,” Jones said. “So those rate hikes are probably going to tip us into recession.”

This article was provided by Bloomberg News.