‘Doom’ gloomy on Fed

The economist known as “Dr. Doom” warned this week that he sees the Federal Reserve’s scramble to tighten policy resulting either in a hard landing for the US economy or persistently high inflation.

Nouriel Roubini, the CEO of Roubini Macro Associates, said the Fed’s benchmark interest rate must rise much higher than its current range of 2.25% to 2.5% to successfully address a “severely inflationary environment.”

“The fed funds rate should be going well above 4% — 4.5% to 5% in my view — to really push inflation towards 2%,” Roubini told Bloomberg on Monday. “If that doesn’t happen, inflation expectations are going to get unhinged.”

Inflation showed signs of slowing this month, prompting optimism among investors that the Fed could pursue a softer series of interest-rate hikes.