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Opinion: The Goldilocks market is dead, Roubini says

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NEW YORK (Project Syndicate)—How will the global economy and markets evolve over the next year? There are four scenarios that could follow the “mild stagflation” of the last few months.

The recovery in the first half of 2021 has given way recently to sharply slower growth and a surge of inflation well above the 2% target of central banks, owing to the effects of the delta variant, supply bottlenecks in both goods and labor markets, and shortages of some commodities, intermediate inputs, final goods, and labor. Bond yields
TMUBMUSD10Y,
1.323%

have fallen in the last few months and the recent equity-market correction
SPX,
+0.26%

has been modest so far, perhaps reflecting hopes that the mild stagflation will prove temporary.

Four scenarios possible

The four scenarios depend on whether growth accelerates or decelerates, and on whether inflation remains persistently higher or slows down. Wall…

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