<\/p>\n
Economist Nouriel \u201cDr. Doom\u201d Roubini is lauding the strength of the US economy despite the Federal Reserve\u2019s tight monetary policies.<\/p>\n
In a recent Bloomberg Television interview, Roubini says that the US continues to chug along while other major economies are starting to shrink.<\/p>\n
\u201cIt has been surprising that given the amount of monetary tightening, some economies have been resilient. But the most resilient economy is the United States\u2026\u00a0<\/em><\/p>\n The Eurozone is going towards a shallow recession\u2026 China is a structural problem. So you kind of generalize what\u2019s happening right now in the global economy. The US is probably the brightest spot right now.\u201d\u00a0<\/em><\/p>\n As the US economy flexes its muscles, Roubini says it will likely drive the Fed to continue hiking interest rates. A growing US economy suggests that there\u2019s still a lot of liquidity in the system, which does not bode well for the Fed\u2019s campaign to push inflation down to its 2% target.<\/p>\n Says Roubini,<\/p>\n \u201cIn the US, paradoxically, so far, in spite of the Fed hiking rates above 5%, the economy has grown recently above potential tight labor market, tight goods market. <\/em>That\u2019s good news in terms of achieving a soft landing, but it is actually bad news for the Fed because it implies that the Fed is not done yet. <\/em><\/p>\n It may have to hike once more or twice more. Eventually, the Fed funds rate might have a 6 handle (6%) rather than a five one (5%). And the more that happens, the more the risk that eventually there might be at least a short and shallow recession.<\/em><\/p>\n But the economic data recently have been reasonably strong even if it\u2019s slowing.\u201d\u00a0<\/em><\/p>\n The Fed funds rate currently stands<\/a> at 5.33%.<\/p>\n