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‘Dr. Doom’ Nouriel Roubini predicts a U.S. recession by the end of 2022—and long-term high inflation

·2 min read
Dania Maxwell—Bloomberg/Getty Images

New York University professor and notorious doom-and-gloom economist Nouriel Roubini said the U.S. economy is not yet in a recession but “we’re getting very close to it.”

“My baseline would be one of a recession by the end of this year,” Roubini, the CEO of economic consultancy Roubini Macro Associates, said in a Bloomberg interview on Tuesday.

Roubini said his prediction is for a “hard landing,” meaning that the economy could see a major downturn soon. He said a combination of global issues like COVID-19, Russia’s invasion of Ukraine, and China’s zero-tolerance COVID policy are to blame for reduced economic growth.

Adding insult to injury, he said, are four-decade-high inflation rates, which point to the possibility of 1970s-style stagflation—in which economic growth slows while inflation stays high.

“If you’re looking at consumer confidence, if you look at retail sales, if you look at measures of manufacturer activity, if you look at housing, they’re all slowing down very sharply at a time when inflation is still very high. That’s stagflation. It’s not just a recession,” he said.

Inflation has not just been on the minds of economists, but also the general public as the consumer price index, a measure of the average change in prices over time, increased 8.6% in May compared with the same month a year ago, up from an 8.3% year-over-year increase in April.

A combination of slow economic growth paired with prolonged high inflation could push stocks down more than expected, Roubini said. In a typical recession, stocks fall 35%, he noted, but if 1970s-style stagflation arrives as he expects, they could fall by more than 50%.

Earlier this month, the Federal Reserve sent a strong signal in its fight against inflation by raising interest rates three quarters of a percent, its most aggressive hike since 1994. On Tuesday Roubini said the Fed should continue to raise rates so that the U.S. economy can at least avoid prolonged inflation, even if there is a recession.

“The Fed has no choice,” he said. “Keep on tightening, even if that’s going to lead to a hard landing.”

Roubini is the latest in an influential group of economists and business leaders, including economist Robert Shiller and JPMorgan Chase CEO Jamie Dimon, who have recently predicted a recession. On Monday, investment bank Goldman Sachs revised its own recession prediction, reporting that an economic downturn was twice as likely as it had predicted previously.

This story was originally featured on Fortune.com