Economist Nouriel Rubini has issued a surprising statement about the future of the US economy.
Rubini, a senior adviser at Hudson Bay Capital, said technological advances offset the impact of trade tariffs. He said the US is a leader in future fields such as artificial intelligence, quantum computing and green technology. “Technology is outweighing tariffs,” he said.
According to Rubini, this technological advantage could increase the US potential growth rate from 2% to 4% by 2030. In contrast, the economists said the impact of tariffs and immigration restrictions could reduce growth by 0.5%, and technological advances are more than making up for this loss.
Rubini, who believes the high tariffs Donald Trump will be restricted by the market, said, “bond investors will force Trump to retreat. The most powerful party is the market’s disciplinary aid.”
In the short term, Rubini predicts a slowdown in the economy. He said increased costs due to tariffs could boost inflation to 4%, limit consumer spending, and lead to loss of trust in both the consumer and business world. In this connection, he said there could be a “short and shallow” recession in the last quarter of 2025.
Rubini also answered the question of how the Fed will act in this situation, saying that the central bank wants to see clear signs of a recession before cutting interest rates. “Inflation expectations are still under control. The Fed will be patient and waiting for data,” said Rubini, adding that he thought the lessons had been learned from the mistakes made in previous periods.
Rubini also said the Fed should not make sudden interest rate cuts as the weakening of the dollar could put further pressure on inflation by increasing import prices. He added that long-term bond yields could diverge from the Fed’s policies due to reasons such as increased fiscal deficits.
Despite the short-term challenges in the economy, Rubini said the US has the potential for strong growth in the long term thanks to its innovative structure, “While tariffs are temporary, technology is a lasting advantage.”
*This is not investment advice.