US economy could face higher inflation and slower growth when Trump takes office, 'Dr. Doom' economist Nouriel Roubini says

Economist Nouriel Roubini is known as "Dr. Doom" for his bearish takes on the economy.

John Lamparski/Getty Images for Concordia Summit

• Nouriel Roubini thinks higher inflation and slower growth are coming on the back of Trump's policies.
• He pointed to Trump's plans to levy steep tariffs and deport millions, which could stoke price growth.
• The pace of inflation could nearly double to 5% in the coming years, Roubini speculated.

Trump's policies are raising the risk for a handful of troubling economic consequences, according to one of Wall Street's most pessimistic forecasters.

Nouriel Roubini — also known as "Dr. Doom" for his bombastic and frequently bearish takes on the economy — said he believes some of Trump's policies could raise prices and slow growth in the US. That could involve inflation rising as high as 5% in the coming years,

he said speaking to Bloomberg on Wednesday, about double the current pace of price growth in the US.

Roubini said interest rates could also rise due to Trump's economic agenda. He predicted that long-end bond yields, which partly reflect interest rate expectations in the economy, could reach as high as 8%.

"Some of the economic policies may lead to higher economic growth," Roubini said, pointing to Trump's push to loosen regulation and slash the corporate tax rate. "But unfortunately, many of the other policies have the implication of higher inflation and lower economic growth."

Roubini pointed in particular to Trump's tariff plan, with the president-elect vowing to levy steep tariffs on goods from Mexico, Canada, and China, and a 10%-20% blanket tariff on most US imports. Experts have said the cost of tariffs could be passed onto buyers, with some businesses already floating future price increases.

Trump has also promised to slash corporate taxes and eliminate taxes in other areas, such as income from tips, overtime, and Social Security benefits. Roubini suggested that could spell trouble given the overarching picture of the US debt, as debt is inherently inflationary.

Trump's agenda could raise the national debt by as much as $15.5 trillion from 2026 through 2035, according to an analysis from the Committee for Responsible Federal Budget.

Trump's plan to carry out mass deportations could also impact the outlook for inflation and growth, Roubini noted, given that immigration has bolstered the workforce and helped tame inflation.

"So definitely mass deportation is stagflationary," he added.

Roubini has repeatedly warned that Trump's second term in office could raise the risk of stagflation, a scenario involving stubborn prices, sluggish economic growth, and steep unemployment. Some analysts describe the situation as even worse than a recession due to the chaos that unfolded the last time the US was in the midst of a stagflationary crisis.

Other forecasters have also warned of the potential for higher inflation in Trump's second term. Deutsche Bank analysts floated a potential inflation increase in 2025, adding it was possible the Fed may not lower interest rates to keep high prices in check.

Trump, though, has repeatedly disputed the idea that his policies are inflationary and said he would lower prices for Americans. He enacted tariffs in his first term as president without a significant inflation increase, but experts say that his policies this time around are far more wide-reaching, explaining the difference in inflation forecasts.

"Trump will once again cut taxes and unleash American energy to lower prices on groceries and other goods when we send him back to the White House," Taylor Rogers, a spokesperson from the Republican National Committee, previously told BI.

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