Investing.com – Two weeks before the meetings of the world’s major central banks, experts have already begun analyzing the possibilities for what these institutions will do with regard to interest rates.
The eminent economist Nouriel Roubini, known in the market as Dr. Doom’ (Doctor Disaster), who predicted the subprime mortgage crisis that led to the 2008 financial crash, believes that markets are wrong to believe that global central banks are about to cut interest rates.
According to Roubini, markets should expect greater commitment from central banks to fight inflation as prices continue to rise around the world.
In an interview with Bloomberg, Roubini said, “In stock markets, I think people think that central banks are no longer raising interest rates, so they will cut them to zero.”
Indeed, the economist warns that the Fed may at the next meeting in .
For Roubini, inflation remains high around the world, and he maintains that it will not fall as much as central banks expect.
And “central banks will have to make the difficult decision to raise interest rates, which poses a greater risk of hard landings and financial instability.”
As Markets Insider reports, the Federal Reserve has raised interest rates 10 times in a row, since March 2022, in an effort to control inflation and cool the economy.
Central bankers will also meet again for another policy meeting next month to discuss the Fed’s next move.
The economist warns that “there may be a short-term and shallow recession that leads them to cut rates”, but according to Roubini, “the central banks say: No, we are not done yet. We will not cut interest rates this year.”
Watch Nouriel Roubini’s interview with Bloomberg here:
2023-05-29 10:56:00
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