Economist Nouriel Roubini has been such a doomsayer for therefore lengthy that he’s earned the moniker “Dr. Doom,” however he sounded uncharacteristically bullish amid Wall Road’s latest panic.
Throughout an interview on Bloomberg TV on Wednesday, he dismissed buyers’ fears {that a} downturn is coming and quipped that the inventory and bond markets have predicted 10 out of the final three recessions.
He added that markets have additionally badly misjudged over the past yr what number of Fed fee cuts are on the best way, as merchants have seen far more aggressive easing.
“The markets are often wrong about what’s going on with the economy and what the Fed is going to be doing,” Roubini mentioned. “There is some significant evidence of some slowdown of the economy, but I don’t think the data suggest that we’re going to have a hard landing anytime soon. If anything, actually, there’s some elements of strength in the economy.”
Wait, what?
He rose to prominence when his warnings in regards to the economic system and the housing bubble had been initially laughed off—solely to be confirmed proper when the Nice Monetary Disaster hit.
Since then, he has frequently flagged quite a few different catastrophes, and in late 2022 warned of a stagflationary debt disaster. He saved ringing the alarm into 2023, saying a “severe recession” was seemingly amid a “Bermuda Triangle” of financial risks and the “mother of all debt crises.”
To make sure, the consensus on Wall Road final yr was that the U.S. would tip right into a recession after the Federal Reserve’s most aggressive string of fee hikes in 4 a long time.
However by final September, because the economic system continued to chug alongside with out hitting the skids, he softened his tone, saying a quick or shallow recession was attainable.
Then U.S. manufacturing and payroll information earlier this month confirmed precipitous declines, triggering a huge inventory selloff in world markets and offering proof that the few remaining bears on Wall Road could also be proper.
Subsequent weekly jobless claims information got here in decrease than anticipated, calming nerves and serving to the inventory market recoup a lot of its losses.
In the meantime, others on Wall Road have highlighted information that signifies underlying power within the economic system. Apollo chief economist Torsten Sløk mentioned in a word on Saturday that the Atlanta Fed’s GDP tracker factors to third-quarter progress of two.9%.
“The bottom line is that there are still no signs of a US recession, and the US economy is doing just fine with steady growth in daily and weekly data for restaurant bookings, air travel, hotel bookings, credit card data, bank lending, Broadway show attendance, box office grosses, and weekly data for bankruptcy filings trending lower,” he added.
