Nuriel Rubini predicted the collapse of the shares market
founder of the world’s largest hedge fund Bridgewater predicted the collapse of the stock market. The fall will occur due to the excessive tightening of the FRS monetary policy. The 2008 global financial crisis, the economist Nuriel Rubini, warned about the collapse of the S&P 500 by another 25%. The Fed to combat inflation will have to increase the rates to a “very harmful” level for the economy, said the legendary billionaire Ray Dalio. However, such a scenario has not yet been laid down in the price of shares, and in the future a collapse will occur in the market, writes RBC.
key The Fed’s rate can reach 6%, Dalio believes that it will be “very harmful, very destroying for the economy.” Such a decision will hit the shares, especially those companies that strongly depend on debt financing. At the same time, the investor pointed out the risks of repeating the stagflation crisis of the 1970s. According to him, central banks are now trying to find a balance between the growth of the economy and the fight against inflation, but it will be very difficult to find this balance.
US Economics will not be able to avoid recession, since the Fed ranges the rates During the period of record inflation, which is combined with a low level of unemployment, the famous economist Nuriel Rubini believes. There have been no such conditions in the United States over the past 60 years, which can lead to a rigid “landing” of the economy.
Fed will have to increase the rate to at least 5-5.25%, and possibly up to 6%, warned Rubini. He expects that in this case many corporations, households, enterprises, will face big problems due to the increase in the cost of servicing debt. If the recession in the United States is more serious than A short and shallow decline, but not as serious as the 2008 global financial crisis, the potential for the share of the shares market is at least 25%. Such a calculation gives such a calculation as a justification. With light recessions, the S&P 500 usually falls from peaks by 30%, with heavy – by 50%. The average amount is 40%, and taking into account the 17%already achieved, about 23-25%are expected to fall further.
