Renowned economist Nouriel Roubini issues the warning as the Fed tries to curb soaring inflation
An eminent economist, Nouriel Roubini, has warned of an impending severe recession, as the US government tries to fight against a four-decades-high inflation rate.
“I think there are many reasons why we are going to have a severe recession and a severe debt and financial crisis,” Roubini told Bloomberg on Monday.
The US economy is in a period of stagflation (low growth and high inflation), while debt ratios are “historically high,” Roubini explained, suggesting that the same applies to other developed nations worldwide.
“The idea that this is going to be short and shallow is totally delusional.” he added.
Roubini, a New York University professor and chief executive of Roubini Macro Associates, was dubbed ‘Doctor Doom’ by Wall Street for predicting the financial crisis of 2008-09.
Economists have been debating whether a recession will hit the US economy this year, as the Federal Reserve has been trying to rein in soaring inflation by hiking its benchmark interest rate. US inflation hit 9.1% in June, the highest rate in more than 40 years.
US Treasury Secretary Janet Yellen earlier denied that the American economy was in recession, saying the nation was instead going through a “necessary and appropriate” slowdown.