Now him CEO of Roubini Macro Associatesbelieves that there is stagflation, similar to that of the 1970s, and debt problems as in the global financial crisis.
But unlike that bubble of 2008, that affected banks and households, this contraction “is going to implode” corporations, hedge funds, private equity or credit funds.
which will generate a strong correction in the S&P 500, which could lead to a drop of at least 30% in the index, with a 40% crash for stocks.
For the expert, it is “an impossible mission” for the United States Federal Reserve to bring inflation back to its 2% target, without causing a recession: “It will be a real forced landing,” he said.
For now, he estimates that the Fed will raise the rate by 75 bp tomorrow, and in the next and last two meetings of the year, it will apply an adjustment of 50 points, which would bring interest to a range between 4% and 4.25% for December.
And when the economy is in recession, with a rate headed for 5%, they will not be able to apply fiscal stimuli that would worsen their debt balances even more, nor would they be able to ease monetary policy, as they would overheat demand again.
Source: Ambito
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