'Dr. Doom' Rubini: "Trump's Economic Policies Are Very Dangerous for Everyone"

"Risky to accept trade, exchange rates, currency, and fiscal policies as is"
"Harris policy has high predictability, causing less shock"

'Dr. Doom' Nouriel Roubini, a professor at New York University, warned that former U.S. President Donald Trump's economic policies are "very dangerous" for both the U.S. economy and markets.

According to Yahoo Finance on the 18th (local time), Professor Roubini said, "There are aspects of former President Trump's policies that could actually help the economy and markets," but added, "However, if you take at face value what former President Trump is pushing in trade, exchange rates, monetary, and fiscal policies, it would be very dangerous."

Professor Roubini is a leading pessimist on Wall Street, famous for predicting the 2008 global financial crisis.

In this U.S. presidential election, both former President Trump and Vice President Kamala Harris's key economic pledges focus on curbing inflation. However, Professor Roubini predicted that Trump's pledges could actually worsen inflation.

Although former President Trump has not yet revealed specific economic pledges, he recently campaigned by saying, "I will make America cheap again," blaming the Joe Biden administration for persistent inflation. He also promised to lower prices and cut taxes.

Tariff imposition is also one of former President Trump's signature pledges. He has stated that he would impose a 60% tariff on Chinese imports and a universal 10% tariff on all other countries. Goldman Sachs predicts that such tariff impositions would raise consumer prices by 1.9%. Former President Trump recently even said he might raise import tariffs up to 20%. If this happens, prices could rise beyond Goldman Sachs's forecast.

Former President Trump argued that the president should have influence over monetary policy, including the Federal Reserve's (Fed) benchmark interest rate decisions. At a press conference held on the 8th at his Mar-a-Lago residence in Florida, he said, "The president should at least have a voice in the Fed," adding, "In many cases, I think I have better instincts than the Fed chair."

Mark Zandi, chief economist at Moody's Analytics, assessed that infringing on the Fed's independence would lead to "higher inflation and a weaker economy." Paul Krugman, a Nobel laureate and professor at the City University of New York, cited the 1970s Richard Nixon administration's pressure for monetary easing as an example, stating, "The result was disastrous. It caused unnecessary inflation surges and laid the groundwork for the misfortunes of the rest of the 1970s."

On the other hand, former President Trump attacked Vice President Harris's pledge to crack down on excessive pricing by major grocery companies as "socialistic." Kevin Hassett, a former senior White House advisor during Trump's presidency, evaluated Harris's economic pledges as "doubling down on the type of policies from the Biden administration that triggered inflation." Steven Moore, an economic advisor to former President Trump, called the claim that Harris's policies are better at curbing inflation "nonsense."

Professor Roubini analyzed that Vice President Harris's policies would have less shock on the market than former President Trump's economic policies. Investors value certainty, and Harris's policies are more predictable.

Professor Roubini said, "Vice President Harris will be more predictable," adding, "Although there are slight differences with President Biden, (investors) know what those policies are, and in fact, those policies have been quite good." He continued, "Growth was strong, the stock market reached record highs, bond yields were low, and job creation was solid," adding, "There were many problems in the U.S. economy, but they were secular and nonpartisan."