'Dr. Doom' Warns of Stagflation Shock if Trump Wins

To be sure, not all of Roubini’s prior forecasts have come to pass. In 2022 he made a similar prediction for a stagflationary debt crisis that thus far has failed to emerge.

Roubini has been a longtime skeptic of rising equity prices, though he’s less bearish when it comes to American technology giants.

“Big Tech is a story that, in my view, is valid in the sense that AI is going to radically change the world starting with the U.S.,” he said. “But it’s not going to happen overnight.”

The economist projects that AI could drive U.S. productivity growth above 3% by the end of the decade, but much of that optimism is already priced into shares, he added.

“Investing into stuff that is technology- and AI-related is a good investment long term, but there will be a significant amount of volatility because of what could happen to inflation, interest rates, and the economy,” he said. “Tech is a long-term play.”

He sees three reasons for why traders have, so far, largely shrugged off the risks of a second Trump presidency win: the tight race with Harris, the prospect that a Trump administration would temper his proposals with a more moderate approach, and the potential for a market selloff that would prevent him from enacting certain policies.