(MENAFN) Nouriel Roubini, a renowned economist and professor at New York University, warned last week during an eToro webinar that the United States economy risked becoming mired in a mess of declining output, rising inflation, and skyrocketing unemployment.
He declared that in order to stop inflation, the Federal Reserve may need to raise interest rates by a factor of two, to 5 percent. Roubini underlined that such an increase might, however, stifle economic expansion and result in a surge in unemployment. In addition, rate increases can lead to a debt crisis.
The economist also issued a warning that attempts by the United States regulator to control inflation might destroy the economy and result in crashes involving stocks, bonds, housing, credit, private equity, and other assets that are in the bubble zone. But if the central bank loses up on containing inflation, cost rises can get out of hand.
According to Roubini, the Fed may be forced to send the United States economy into a recession that is much worse than the one it has managed to avert due to persistent inflation and the coronavirus epidemic.
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