![Economist Nouriel Roubini made two bleak predictions for the U.S. economy as inflation reaches decade-highs and consumers are spending more on food, gas and other necessities. [Screenshot Bloomberg]](https://images.dailycaller.com/image/width=960,height=411,fit=cover,f=auto/https://cdn01.dailycaller.com/wp-content/uploads/2022/08/Screen-Shot-2022-08-16-at-7.46.22-AM-e1660650444228.png "Economist Nouriel Roubini made two bleak predictions for the U.S. economy as inflation reaches decade-highs and consumers are spending more on food, gas and other necessities. [Screenshot Bloomberg]")
Economist Nouriel Roubini made two bleak predictions for the U.S. economy as inflation reaches decade-highs and consumers are spending more on food, gas and other necessities.
The economy will either see inflation remain exceptionally high or the economy will have a “hard landing,” the chairman and chief executive officer of Roubini Macro Associates said in an interview Monday with Bloomberg Television.
“The fed funds rate should be going well above 4% — 4.5% to 5% in my view — to really push inflation towards 2%,” Roubini said. “If that doesn’t happen, inflation expectations are going to get unhinged.”
“Or if that happens, then we are going to have a hard landing. Either way, either way you get a hard landing or you get inflation getting out of control,” he predicted.
Roubini said raising the interest rates to nearly 3.8% by the end of 2023 will not be enough.
“Even if you have 3.8%, we have inflation still well above target around 8%, falling only gradually. Markets expecting a pivot and the Fed cutting rates next year to me sounds delusional.”
Roubini said the “hard landing,” which is another term for a recession, may be inevitable.
“In the U.S., whenever you have inflation above 5% and unemployment below 5%, the Fed tightening has led to a hard landing. So my baseline is a hard landing.”
Inflation remained at 8.5% from July 2021 to 2022, a historic high, recent data from the Bureau of Labor Statistics (BLS) shows. The Consumer Price Index (CPI) did not change from June to July, but from May to June the CPI, which represents the average change in the price of consumer goods, rose 1.3%. Meanwhile, the food index increased 1.1% in July, according to the BLS. (RELATED: ‘Took A Breather’: CNN Gets Ripped For Suggesting Inflation, At 8.5%, Is Something To Be Happy About)
Mega corporations like Walmart saw an average decrease of 2.7% of foot traffic at U.S. locations, Reuters recently reported. Aldi, which is a discount grocer and Walmart competitor, saw an 11.5% increase in foot traffic, while Dollar General experienced a 4.1% increase, according to Reuters.
Roubini said he doesn’t believe “monetary policy is tight enough to push inflation toward 2% fast enough.”
“We are still in a severely inflationary environment, not just in the United States but around the world.”