Bracing for a Mild Global Recession: Nouriel Roubini's Warning

Economist Nouriel Roubini warns that a global recession is looming, with three potential scenarios posing serious risks to markets. The most positive outcome would be a "soft landing" where central banks manage to bring inflation down without triggering a recession. However, a "hard landing" scenario could lead to a protracted recession and financial instability. If central banks fail to tame inflation, a fourth scenario of allowing above-target inflation could emerge. The eurozone is already in a technical recession, the UK's growth has slowed, and the US experienced a sharp slowdown in the first quarter. China's recovery has stalled, and emerging markets are facing anemic growth and high inflation. Central banks may need to raise rates further, increasing the risk of an economic contraction and new debt and banking stresses. The possibility of a short and shallow recession has become more likely, which could erode consumer and business sentiment and potentially lead to a more severe downturn. Asset prices, including stocks and bonds, could be negatively impacted in these scenarios.