Nouriel Roubini sees a shallow US recession hitting by late 2025 because of tariffs.
He also sees technological advancements in AI and robotics driving a US investment boom.
Bond market pressures may force Trump to de-escalate tariffs, Roubini said.
Wall Street’s Dr. Doom isn’t as gloomy about the US economy as he has been in past years.
Nouriel Roubini, the famed economist known for his bearish views on the market, is surprisingly upbeat in the face of tariff-fueled anxieties and broad economic uncertainty, which have been a headwind for stocks.
Speaking with Bloomberg this week, the New York University professor gave his thoughts on various topics, offering up predictions on a recession, the bond market, and artificial intelligence.
Here are four things the renowned economist is thinking about.
The US could enter a downturn by the fourth quarter of 2025, which could be brought on by the inflationary impact of tariffs, Roubini said.
Roubini said he thinks it’s likely that President Donald Trump will edge back from his harshest tariff threats, with a 10% to 15% universal duty on goods imported from many countries and a 60% tariff on China.
That’s the tariff plan Trump proposed on the campaign trail, Roubini noted. Under that plan, he estimated that the core personal consumption expenditures, the Fed’s preferred inflation measure, could trend toward 4% by the end of the year, up from 2.6% in March.
“That’s a hit to disposable income. You have weakening of consumer and business sentiment,” he said of his recession forecast, adding: “It’s going to be short and shallow because then the Fed is going to cut rates.”
While some investors have been shifting away from US assets, Roubini sees the US market prospering over the next several years, largely due to optimism stemming from increased productivity.
He pointed to America’s edge over other nations in technological advancements such as AI, robotics, and quantum computing.
In his view, growth resulting from those areas could more than offset the negative impact of tariffs. Roubini estimated that tech advancements could raise US yearly growth from 2% to 4% by the end of the decade.
If Trump implemented a 10% universal tariff and a 60% tariff on China, he said, trade policy would likely dent US growth by just half a percentage point over that timeframe.
“What I’ve recently said is that tech trumps tariffs. And what I mean is that the US is really No. 1 in many of the technologies of the future,” Roubini said.
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