'Dr. Doom' Roubini on Trump's Second Term: 'Inflation Will Be Higher, Growth Is Going To Be Lower'

Renowned economist Nouriel Roubini recently expressed his apprehensions about President-elect Donald Trump‘s second term.

What Happened: Roubini, who gained the moniker “Dr. Doom” after correctly predicting the 2008 global financial crisis, shared his economic predictions for Trump’s second term in a recent interview.

While acknowledging that some of Trump’s economic strategies could stimulate growth, he warned that others might result in increased inflation and reduced economic expansion.

During the interview with Bloomberg, he specifically mentioned Trump’s proposed tariffs on Mexico, Canada and China, and suggested that similar measures could be applied to significant European trading partners.

Besides tariffs, Roubini also pointed to other Trump policies that could drive up prices, such as making certain tax cuts permanent, potentially devaluing the dollar, and meddling with the Federal Reserve’s independence.

"Unfortunately many of the other policies are going to have an implication of higher inflation and lower economic growth. The first thing he has already announced is going to be tariffs against Mexico, Canada and China and that's only the beginning," he said.

Also Read: Here’s How Trump’s Policies Might Shape The Market’s Future

Roubini also cautioned about the possibility of higher bond yields and rising inflation rates, which could pose challenges for consumers already struggling with elevated housing costs and grocery prices.

 "Getting out of the Paris Accords is going to make climate change much worse [and] increase food prices and things of that sort. So if you look at this list of policies all of them have the impact that over time inflation will be higher, growth is going to be lower," he added.

His warnings about stagflation, a state of stagnant economic growth coupled with high inflation, mirror those of JPMorgan CEO Jamie Dimon, who also views it as a possible consequence of the current fiscal and monetary stimulus.

Why It Matters: Roubini’s predictions, if accurate, could have significant implications for the global economy. His previous forecasts, particularly his accurate prediction of the 2008 financial crisis, have earned him a reputation for economic foresight.

Therefore, his current warnings about potential economic stagnation and inflation during Trump’s second term should not be taken lightly.

Furthermore, the potential for stagflation could have serious consequences for consumers, particularly those already struggling with high living costs. If inflation continues to rise while economic growth remains stagnant, consumers could face even greater financial strain.

Finally, the potential impact of Trump’s proposed tariffs and other economic policies on international trade relations should not be overlooked.

If these policies lead to trade disputes or economic instability, they could further exacerbate the economic challenges forecasted by Roubini.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.