Central banks to ‘blink’ to avoid crash, Roubini says

Source: afr.com afr.com

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“If we try to increase interest rates to fight inflation we cause massive debt defaults – households, corporates, financial institutions, governments. “There would be economic and financial crashes. So central banks will have to wimp out.” As a result, he said, inflation would remain above targets for longer. The warning comes ahead of the Reserve Bank of Australia’s expected move on Tuesday to increase the official cash rate for the 10th straight monthly meeting to 3.6 per cent. Professor Roubini worked as an adviser to US president Bill Clinton from 1998 to 2000, and has also been employed by the...