Roubini: A Sluggish Economy Equals Continued QE and a Rising Market for Two More Years

“The stock market rally will continue for the next two years, renowned economist Nouriel Roubini told CNBC.

Roubini, a professor at New York University, is known for correctly predicting the housing bubble and ensuing financial crisis.

His forecast for a long-running stock rally seems at odds to his reputation for predictions so pessimistic they sometimes seem to border on the apocalyptic. 

But Roubini, who runs Roubini Global Economics, explained that stocks have room to run because the economy is performing poorly. That means the Federal Reserve will maintain low interest rates through quantitative easing (QE).

“Growth is not going to pick up and inflation actually is falling,” Roubini told CNBC. “So the markets are worried about tapering off sooner, but I think tapering off is going to occur later and, therefore, the market is going to rally.”

Many observers credit the Fed’s QE program for boosting the stock market.

However, the good times for equities will end when the wealth gap between Wall Street and Main Street becomes too large, Roubini warned. Eventually, the economy will have to accelerate or stocks will face a correction. …”

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