A ‘perfect storm’ of recession, debt, and out-of-control inflation is coming for markets this year, ‘Dr. Doom’ Nouriel Roubini says

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A “perfect storm” is brewing in 2023, and a markets are going to get hit with a recession, debt crisis, and out-of-control inflation, according to “Dr. Doom” economist Nouriel Roubini.

Roubini, one of the first economists to call the 2008 recession, has been warning for months of a stagflationary debt crisis, which combines the worst aspects of 70s-style stagflation and the ’08 debt crisis.

“I do believe that a stagflationary crisis is going to emerge this year,” Roubini said in an interview with Australia’s ABC on Thursday.

With consumer inflation still sticky at 6.4%, Roubini estimated that the Federal Reserve would need to lift benchmark rates “well above” 6% for inflation to fall back to its 2% target.

But that could spark a severe recession, stock market crash, and an explosion in debt defaults, leaving the Fed with no choice but to back off its inflation fight and let prices spiral out of control, he added. The result would be a steep recession anyway, followed by more debt and inflation problems.

“Now we’re facing the perfect storm: inflation, stagflation, recession, and a potential debt crisis,” Roubini warned.

He has remained ultra-bearish on the economy, despite the market’s growing hope that the US could skirt a recession this year.

Though more bullish commentators are making the case for a healthy rebound in the S&P 500, which fell 20% last year, Roubini has previously warned the benchmark stock index could slide another 30% as investors battle extreme macro conditions.