#Credit #yahoofinance #stockmarket
New York University Professor Emeritus of Economics Nouriel Roubini joins Yahoo Finance Live to discuss the U.S. banking crisis, economic growth, the possibility of a recession, rate hikes, oil, and the labor market.
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Renowned economist Nouriel Roubini has issued a stark warning that a credit crunch could hit the United States economy by the end of the year, which could push it into a full-blown recession. Roubini, who accurately predicted the 2008 financial crisis, stated that there are a number of factors which are currently weighing on the country’s economic outlook.
The first issue Roubini highlighted is the ongoing trade war between the United States and China. President Donald Trump’s imposition of tariffs on Chinese imports has caused significant uncertainty, leading to a drop in investment and trade. The International Monetary Fund (IMF) has already downgraded its growth estimates for both countries as a result of the dispute.
Roubini also raised concerns about the current monetary policy of the Federal Reserve. The central bank has been gradually increasing interest rates over the past year, a move which has been widely criticised by Trump. Roubini argued that this could lead to a credit crunch, where businesses and individuals find it more difficult to borrow money.
The economist also pointed to the recent tax cuts, which were introduced by Trump’s administration. While this provided a short-term boost to the economy, Roubini warned that it could lead to a significant increase in government debt in the long-term.
Roubini’s warning has been backed up by other experts in the field. Professor Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University, argued that the US economy is already “running on fumes” and that a downturn is likely to happen sooner rather than later.
The IMF has also issued its own warning, stating that the current economic expansion is “losing steam” and that growth is expected to slow in the second half of 2019 and into 2020.
While some may argue that the US economy is currently performing well, with low unemployment and a strong stock market, it is clear that there are several warning signs on the horizon. The ongoing trade war with China, coupled with the Federal Reserve’s monetary policy, and the long-term impact of the recent tax cuts, could all combine to push the economy into recession.
It is important that policymakers take note of these warnings and take steps to address the underlying issues before it is too late. Failure to do so could lead to a repeat of the devastating economic crisis of 2008.
Nouriel Roubini predicts the Credit crunch will trigger a recession in the U.S. later this year. appeared first on Inflation Protection.
