Roubini: '50% chance the US expands war with Iran… Fed under pressure to raise rates'

Nouriel Roubini, a New York University professor known as “Dr. Doom,” warned of the possibility that a military confrontation between the United States and Iran could escalate.

According to Bloomberg on the 27th (local time), Roubini said, “There is a greater than 50% chance that President Trump will escalate the war with Iran.”

He noted that if the war escalates, “stagflation risks similar to those of the 1970s could emerge.”

He also said of the Federal Reserve’s monetary policy that it “nearly undermined its credibility by missing the timing for rate hikes in 2022,” adding that “the new chair may have limited options other than raising rates to establish credibility early on.”

The remarks suggest that geopolitical risks and monetary policy could simultaneously act as headwinds for markets.