Roubini Shared His Mid-Term USD Forecast

Roubini shared his mid-term USD forecast. Roubini said the rise in the US Treasury bond yield could confuse the markets.

Nouriel Roubini, a professor at New York University and formerly adviser to the US government, warned that the rise in the US Treasury bond rate could confuse the markets and drive many hedge funds or private asset management companies such as Archegos Capital into collapse. Roubini stated that low or negative interest rates and financial incentives cause investors to take excessive risk in developed countries. Noting that the cyclical price earnings ratio, which shows the negligence of the markets, reached the levels in 1929 and 2000s, Roubini said about the increase in risk appetite: "We are dealing with massive bubbles, risk taking and leveraged trading. Many players have taken massive risks with too much leveraged trading, which means some will burst." Stating that the first shock may occur with the 10-year US Treasury bond interest rate exceeding 2 percent this year, Roubini stated that the rise in inflation and the emergence of signs of a hot war between the USA and China constitute other risk factors. According to the statements of Roubini, the dollar will weaken in the medium term with the increase of the double deficit in the US economy and the US sanctions against countries such as Russia, China and North Korea will cause these countries to move away from the US dollar.     This article has contributions of Bloomberg HT.