Prominent economist Nouriel Roubini predicted on Monday that the economy’s trajectory would be either runaway inflation or a recession.
Roubini’s prediction is notable because he is one of the few economists to correctly predict the collapse of the 2007-2008 housing bubble. His correct analysis earned him the nickname “Dr. Doom” a.
What did Roubini say?
appeal an interview on Bloomberg TelevisionRoubini predicted a “hard landing,” standard economist jargon for what precedes a recession fueled by attempts to control inflation.
“In the US, Fed tightening has resulted in a hard landing whenever inflation was above 5% and unemployment was below 5%,” Roubini said. “So my baseline is a hard landing.”
Roubini argued that the US Federal Reserve needed to take aggressive action on interest rates in order to meet the central bank’s target of 2% inflation.
“The Fed’s policy rate should be well above 4% – 4.5%-5% in my opinion – to really push inflation towards 2%,” he said.
“If that doesn’t happen, inflation expectations will get out of hand,” predicted Roubini. “Or if that happens, we’re going to have a hard landing. So either you get a hard landing or inflation spirals out of control.”
Unfortunately, Roubini explained that the ingredients for a “stagflationary debt crisis” plaguing the US economy, which he says will result in a recession that will be “long, protracted, severe and fraught with financial hardship across the board.”
“We’re still in a highly inflationary environment, not just in the United States but around the world,” Roubini said.
One more thing?
Roubini’s stark analysis comes less than a week after President Joe Biden celebrated “Zero Inflation”.
The truth is that the US economy experienced a 0% increase in inflation between June and July. But the US economy is still experiencing woefully high inflation at 8.5% yoy. according to the current consumer price index.
https://www.theblaze.com/news/nouriel-roubini-unhinged-inflation-severe-recession The famous economist makes a grim prediction about Biden’s economy: ‘runaway’ inflation or ‘severe’ recession