Economist Nouriel Roubini's forecast shows that core inflation in the United States will rise to 3.5% by the end of 2025, amid weakening economic growth and the risk of recession.
Roubini warned of an inflationary shock and mild recession that would make it difficult for the US Federal Reserve to cut interest rates soon, and predicted global trade negotiations would stall and put tariffs on many countries.
MAIN CONTENT
US core inflation could hit 3.5% by end-2025, with warning of “mini-stagflation”
Fed unlikely to cut interest rates before December as economic growth slows and trade risks rise
Atlas America Fund focuses on protecting investors against inflation risks and prolonged economic instability, with a cautious and flexible investment strategy.
How does economist Nouriel Roubini predict US core inflation will rise to 3.5% by the end of 2025?
Based on his experience in forecasting the economic crises of 2008 and 2020, Roubini said that core personal consumption expenditures (PCE) inflation will remain high and above the Fed’s target for many years to come. He described the situation as a “mini stagflationary shock” – a combination of high inflation and slowing economic growth that is difficult for the Fed to handle.
Inflations will remain stubbornly high, forcing Fed policies to remain tight even as growth slows, warns Nouriel Roubini.
Nouriel Roubini, Economist, 2024, CNBC
According to Roubini, the Fed’s preferred metric, core inflation, has yet to show signs of a sharp decline, forcing the Fed to maintain its tight monetary policy. The size of the debt, the cost of goods and geopolitical tensions are all adding pressure on prices, making it difficult to cool inflation.
Why the Fed Can't Cut Rates Before December 2025, and How Does This Affect the Market?
Roubini predicts the US economy will grow more slowly in the second half of 2025 and could enter a mild recession, but the Fed will not cut interest rates before December due to high inflation pressures, which will challenge financial markets with growth and inflation moving in opposite directions.
“We cannot expect the Fed to cut interest rates before the end of the year when inflation is still high,” Roubini stressed, warning that the path to economic recovery is getting narrower.
Nouriel Roubini, Economist, 2024, CNBC
Asked about the risk of stalled trade talks and widespread tariffs, Roubini predicted a scenario of “around 15% tariffs on many countries” that would have a steady negative impact, not as shocking as the 2025 tariffs but still a difficult market.
What is Atlas America Fund's goal in the context of high inflation and constant volatility?
The Atlas America Fund, where Nouriel Roubini serves as Chief Investment Officer, focuses on protecting the portfolio from long-term inflation and economic volatility rather than chasing big short-term gains. Since launching in late 2023, the fund has returned more than 5%, demonstrating its resilience in volatile market conditions.
The priority now is “slow, steady growth, not chasing short-term spikes,” said Puneet Agarwal, the fund’s manager. The fund has shifted its asset mix away from real estate and toward investments such as gold, inflation-protected bonds and cybersecurity technology.
Atlas America Fund Factors S&P 500 Index Assets under management $17 million Trillions of dollars Return since launch (November 2023) Over 5% Higher than Atlas America Fund Volatility during bear market (April 2025) Down less than 3% Down about 20% Investment strategy Focused on inflation protection and long-term portfolio protection Reflects overall stock market growth
What investment strategy changes has Atlas America Fund made to adapt to global economic trends?
The fund has increased its exposure to gold, short-term U.S. government debt and agricultural commodities as a hedge against inflation. It has recently expanded into cybersecurity and defense technology, while reducing its exposure to real estate as a hedge against geopolitical and financial turmoil.
Nouriel Roubini also predicted a gradual reduction in dependence on the US dollar, causing many investors to begin diversifying their assets to cope with increasingly tight financial conditions and increased risks globally.
Frequently Asked Questions
What economic events has Roubini accurately predicted in the past?
He is known for his early predictions of the 2008 economic crisis and the 2020 pandemic recession, and is highly regarded for his extensive experience in economics and investment.Why does the Fed keep interest rates high even though the economy is slowing?
Due to high inflationary pressure, the Fed is forced to maintain a tight monetary policy to avoid the risk of prolonged and difficult-to-control inflation.What is Atlas America Fund's investment strategy?
The fund aims to protect assets against inflation risks and prolonged instability, prioritizing stable growth over large short-term profits.How do tariffs affect global markets?
Roubini predicts that average tariffs of around 15% would weigh on global trade, raising the risk of a slowdown in economic growth but not cause a major shock.How has the Atlas America Fund changed its portfolio in response to current economic pressures?
The fund reduced its investment in real estate, increased its weight in gold, inflation-protected bonds and invested in defensive technology sectors such as cybersecurity.
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