The following is an excerpt from the Economic Times: “First 2008 Recession, now Fed: US Economist Roubini aka ‘Dr. Doom’ predicts correctly.”
MUMBAI: The US Federal Reserve decided to maintain its pace of monetary stimulus on Wednesday, wrong-footing many global economists who were expecting it to start tapering its $85-billion monthly bond buying programme.
But there’s one man who read the Fed right amid the chorus of concern.
American economist Nouriel Roubini got it bang on again when he predicted the Fed will not taper its asset-buying program in the September meeting.
Before the meeting, Roubini had tweeted: “Based on the US macro-economic data, the Federal Reserve should not, and may not, taper. If it does, it will taper lite with stronger guidance and escape clause.”
Known as ‘Dr Doom’ for anticipating the collapse of the United States housing market and the global recession of 2008, Roubini on Thursday tweeted after the Fed meeting, “I am not going to say I told you so, but I did.”
The economist had said that it was unlikely that the Fed will taper its $85-billion bond buying exercise in September because the US housing and refinance applications are falling off the cliff, as tapering talks have led to surge in mortgage rates.
Earlier this month, Roubini had also said the US employment report has been weak. Thus, there will be no tapering in September and there will be dovish Fed statement to prevent further rise in interest rates.
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