Dr Catastrophe’s prognosis: what is the risk in the US if Donald Trump wins

Dr Catastrophe’s prognosis: what is the risk in the US if Donald Trump wins

October 10, 2024 – 10:17

In statements reported by Bloomberg, Nouriel Roubini pointed out that the Republican candidate’s policy plans threaten the US economy. He also made an important recommendation to investors.

The prestigious economist Nouriel Roubini, known in the investment community as “Dr. Doom” for predicting the mortgage crisis that caused the 2008 financial crash, launched a new warning about the possible return of Donald Trump to the White House.

For Nouriel Roubini, Trump’s victory could trigger a stagflation shock. “Trump’s combination of trade, currency, monetary, fiscal, immigration and foreign policies poses much greater risks of stagflationary outcomes than if Kamala Harris is elected,” Roubini warned at the Greenwich Economic Forum in Connecticut last Wednesday.

In statements collected by BloombergRoubini points out that the Trump’s policy plans which include imposing higher tariffs, devaluing the US dollar and take a tough stance on illegal immigration, They threaten to slow the economy and, at the same time, boost inflation.

The risks of a second Trump presidential victory

The financial guru sees three reasons why traders, until nowhave ignored the risks of a second Trump presidential victory: The close race with Harris, the prospect of a Trump administration tempering its proposals with a more moderate approach, and the possibility of a market sell-off that would prevent him from enacting certain policies.

Roubini too pointed to tensions in the Middle East as a possible catalyst. Further escalation could lead to a rise in oil prices, which would increase price pressures, the economist warned.

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The November presidential election focuses the attention of the markets

The November presidential election focuses the attention of the markets

Roubini’s investment recommendation

To protect against these risks, Roubini recommended investors hold positions in gold, short-term duration bonds, and inflation-protected Treasury securitiesor TIP, collected Bloomberg.

Roubini was a long-time skeptic about rising stock prices, although he is less pessimistic when it comes to American tech giants.

The economist projects that the Artificial Intelligence (AI) could drive productivity growth U.S. growth above 3% by the end of the decade, but much of that optimism is already reflected in stocks.

Source: Ambito

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