US headed to severe recession: American economist

Renowned US economist Nouriel Roubini has predicted a severe recession in the United States as the government tries to curb soaring inflation.

Roubini told Bloomberg on Monday that a combination of soaring inflation coupled with stagnation would lead to an economic recession in the US and elsewhere.

According to the government’s June statistics, inflation surged to a new four-decade high in the United States, as prices continue to climb at the fastest pace across many sectors of the economy.

In this regard, Roubini, who is a New York University professor and Chief Executive of Roubini Macro Associates, issued a warning citing various reasons for an imminent recession.“I think there are many reasons why we are going to have a severe recession and a severe debt and financial crisis.”

The US economy is in a period of stagflation (low growth and high inflation), while debt ratios are “historically high,” Roubini pointed out.

“The idea that this is going to be short and shallow is totally delusional,” said  Roubini , who has been nicknamed “Doctor Doom” by Wall Street for predicting the financial crisis of 2008-09.

In the meantime, US President Joe Biden and White House officials have been continuously making efforts to downplay the recession and blame the Federal Reserve for the unprecedented inflation.

“We’re not going to be in a recession, in my view,” Biden told reporters on Monday. “The employment rate is still one of the lowest we’ve had in history. It’s in the 3.6 (percent) area. We still find ourselves, the people, investing.”

“My hope is we go from this rapid growth to a steady growth. And so, we’ll see some coming down. But I don’t think we’re going to — God willing — I don’t think we’re going to see a recession,” he continued.

US Treasury Secretary Janet Yellen earlier this month rejected claims that the American economy was in recession, saying the nation was instead going through a “necessary and appropriate” slowdown.