Hard landing or permanently high inflation - 2 options for the US economy

Renowned economist Nouriel Roubini regularly makes sure to earn his nickname "Dr Doom" (Doctor Apocalypse) by displaying his pessimism for the economy and global markets, an exercise he has indulged in again in an interview on Bloomberg Television's "Balance of Power With David Westin" show yesterday.
He indeed estimated that there are only 2 options open for the American economy: a hard landing or inflation at a permanently high level.
Indeed, according to him, the Fed will have to raise its rates more than it currently plans to control inflation.
While the Fed's latest projections suggest the Fed Funds rate will reach 3.375% at year-end and 3.8% at the end of 2023, Roubini estimated that "the fed funds rate should be well above 4% - 4 .5% to 5% in my opinion - to really push inflation towards 2%".
"If that doesn't happen, inflation expectations will shoot up," and "if that happens, then we'll have a hard landing," he explained, summing up that "in any case, either you have a hard landing, or you have inflation spiraling out of control. He also warned that this could have a very strong impact on the markets, explaining that "
markets expecting a pivot and a Fed rate cut the
Pointing out that “in the United States, whenever you had inflation above 5% and unemployment below 5%, Fed tightening led to a hard landing,” Roubini claimed that this outcome is his scenario. basic (most likely).
Finally, the economist warned that the geopolitical context could continue to fuel inflation, citing in particular China's strict Covid Zero policy, which forces authorities to close businesses and confine the population in the event of epidemics. major events, or even the ongoing war in Ukraine which is impacting the prices of basic products, in particular energy.

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