The Federal Reserve is likely to wait until Donald Trump blinked in the economy, ‘Dr. DOOM ‘ROUBINI says
Nuriel Roubini, the economist who predicted the 2008 Global Financial Meltdown to get himself nicknamed Dr. Doom, entrepreneurs have warned against the Federal Reserve reserve for a quick resolution to the foaman in the financial marketparking of President Donald Trump’s tariffs on international trade.
A week ago, Trump announced the sweeping of tariffs against many countries, including a heavy debt to Chinese imports that have now raised 104%. Financial markets cratered with concerns The transition will drag the US and other backdrops in retrospect.
NASDAQ 100 loses 12% and Bitcoin (Btc), the largest cryptocurrency according to the market value, dropped by 10%, pressing the prices below $ 75,000 at one point. Volatility in the US Treasury market exploded, along with Gives longer dated bonds Surging, shipping prices are less even though the equity markets are sinking. That raised fears of a fully blown dollar liquidity crisis as observed five years ago during the covid crash.
The Haka -haka is Rife The Federal Reserve is about to move to ease the liquidity conditions, as did in 2020, which puts a floor under asset prices. Entrepreneurs have priced at least five quarter-point interest-rate cuts from Fed Chair Jerome Powell for this year, according to the Fedwatch’s Fedwatch tool. Roubini suggests that it will not happen.
“There is, of course, a chicken game between Trump put in and Powell put it. But I will say that the price of the strike for Powell Put will be lower than the strike price for Trump’s place, that means Powell will wait until it is Trump’s blinking, ” Roubini told Bloomberg.
In other words, Powell is likely to wait for Trump to prevent his rhetoric before interrupting to stabilize volatility in the market. This method makes sense given to the current in the market in the market is largely a result of Trump’s tariffs.
Emotion can quickly reverse a single-social media post from Trump expressing a possible trade deal or conversation with China. An episode from early this week is introducing. On Monday, an unconfirmed report of a pausing tariff was acknowledging a sharp advances in market values, just for the news that it would eventually be not true.
Adhesive inflation, no backdish
Roubini, who runs the Robini Macro Associates, expects inflation to stick to a new world of higher tariffs, hurting bonds longer. It slightly explains the swoon in the 10- and 30-year note of the US treasury and the resulting promotion of the produce.
At the same time, he said he hoped the US would avoid slipping into a recession, contrary to the Zeitgeist market and pricing on betting platforms, suggesting more than 50% economic chances faced with back-to-back quarterly contraction rates on rate growth.
