Crisis Prophet Roubini Issues Inflation Warning for Trump’s Second Term

Renowned economist Nouriel Roubini has issued warnings regarding the economic implications of Donald Trump's potential second presidential term. While it is believed that Trump's return to the presidency could initially lead to a short-term market rally, Roubini has expressed concerns that the long-term economic effects could be negative.

In statements made to Bloomberg, Roubini noted that some of Trump’s economic policies could initially result in high economic growth. However, he cautioned that Trump's plans to impose tariffs on countries like Mexico, Canada, and China are merely a starting point and such policies could lead to increased inflation.

"The long-term economic effects of the policies might be negative," Roubini stated, emphasizing that leaving the Paris Climate Agreement would exacerbate climate change, potentially leading to rising food prices. He further highlighted the potential of Trump's economic policies to boost inflation while decreasing economic growth over time.

Roubini remarked, "We need to be prepared for a scenario where long-term bond yields could exceed 4%, potentially reaching levels of 6%, 7%, or even 8%." He also pointed out that inflation might rise from 2% to 3%, 4%, or 5%. These scenarios raise uncertainties in the markets and highlight potential economic risks.