– While inflationary fears are picking up, the markets have not demonstrated a readiness to accept higher interest rates.
Or, like in 2013, they have to backpedal and say no, there is a problem with inflation and we have to start tapering sooner than we said, we need to start raising rates sooner than we said, and we could have a repeat of what happened in 2013,” Roubini told Michelle Makori, Kitco’s editor-in-chief.
Either you’re behind the curve, you’re going to cause inflation, or if you don’t want to be any more behind the curve, and then you signal, ‘I’m going to tighten’, then you could have a bond market and a credit market crash that could really weaken the economy, if not stall it.