"Doomsday Doctor" goes against the grain: No signs of a hard landing for the US economy
American economic expert Rubini stated that there are currently no signs of a hard landing for the US economy. He pointed out that the market often misjudges the economic situation and Federal Reserve policy expectations, believing that the data does not indicate an imminent hard landing, but rather some strong factors exist. Rubini was initially ridiculed for warning about an economic bubble, but he proved to be correct during the great financial crisis. Wall Street widely believed last year that the US economy would fall into recession, but in reality, the economy maintained its growth momentum. The latest data shows that the US economy is performing well, with no signs of a recession
In an interview last week, he dismissed concerns from investors about an impending economic recession, joking that the stock and bond markets had predicted ten out of the last three economic downturns.
He added that the market had also severely misjudged the Fed's rate-cutting prospects over the past year, with traders expecting a more aggressive easing policy at the time.
Rubini said, "Market expectations of the economic situation and the actions the Fed will take are often wrong. There is some clear evidence that economic growth has slowed, but I don't think the data suggests we are heading for a hard landing. In fact, if anything, there are some strong factors in the economy."
Such words coming from Rubini are particularly unusual.
He initially gained fame for his warnings about the economic and real estate bubbles, which were initially mocked but proven correct when the financial crisis hit. Since then, he has frequently pointed out many other disasters and warned at the end of 2022 of the possibility of a stagflationary debt crisis. By 2023, he has been sounding the alarm, citing the "Bermuda Triangle of the U.S. economy" and the "mother of all debt crises," warning of a "severe recession."
This was actually the consensus on Wall Street last year, with economists widely believing that after the Fed implemented the most aggressive series of rate hikes in 40 years, the U.S. economy would fall into a recession.
However, by September last year, as the economy continued to grow without a slump, Rubini gradually softened his tone, suggesting that there might be a brief or shallow recession.
Then, at the beginning of this month, sharp deteriorations in U.S. manufacturing and wage data triggered a massive sell-off in global markets, proving that the few remaining bears on Wall Street might be right.
Subsequent weekly jobless claims data lower than expected eased tensions and helped the stock market recover most of its losses.
Meanwhile, others on Wall Street have also pointed out data showing the potential strength of the economy. Apollo's chief economist Torsten Slok said in a memo last Saturday that the Atlanta Fed's GDP tracker showed a growth rate of 2.9% in the third quarter.
"Most importantly, there are currently no signs of a U.S. economic recession. The U.S. economy is performing well, with daily and weekly data on restaurant bookings, air travel, hotel reservations, credit card data, bank loans, Broadway show attendance, total box office revenue, all steadily increasing, and weekly bankruptcy applications trending downward," he added