Roubini: Fed taper will be slow – 3 years to normalize rates

Nouriel Roubini is often, somewhat unkindly, referred to as Dr. Doom (or ‘Permabear’) because of the many pessimistic economic predictions he’s made in the past.

But ever since he accurately forecast the 2008 global financial crisis sparked by US sub-prime lending, people have tended to listen to the NYU’s Stern School of Business professor and IMF, World Bank and US Fed economist.

Roubini, who now heads his own global economics consulting business, is no fan of gold, but his prediction about the pace of the Fed’s tapering should delight gold bugs.

If the Fed continues to print money at the current rate of $85 billion a month and do not announce cuts to its quantitative easing program when it meets in October, the US central bank’s balance sheet would top the $4 trillion mark by the end of the year.

Roubini says (around 1:00 minute into the conversation)  whether under noted dove Janet Yellen or another Chairman when Ben Bernanke steps down in January next year, tapering by the Fed will be a slow process.

He sees the Fed taking three years to normalize rates from the current near zero percent:

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