'Dr. Doom' Roubini says 10% fall in the S&P 500 'highly possible'

The famously pessimistic Nouriel Roubini warned about overvalued equities and reiterated his view that stocks could plunge by as much as 10%.
“For the rest of the year, I would be short U.S. stocks,” he said speaking on Bloomberg TV.
He added that it is “highly possible” that U.S. stocks may fall 10% given “sticky” inflation and rising oil prices.
Mr. Roubini listed investor optimism about inflation falling to 2% as one of the greatest misconceptions these days.
He added that we are in the era of ‘great stagflation’ with high inflation as a result of several supply and demand side factors.
“2% is at this point is mission impossible and the new normal may be somewhere between 3-4%... inflation will be much higher for the long term.”
Speaking about the Fed, Mr. Roubini said the good news is that “we are not going to have a real hard landing.”
“The question is whether we’re going to have a soft landing or a bumpy landing.”
“Markets are a bit too optimistic that the Fed is going to aggressively cut rates, starting early next year… The earliest that Fed is going to be starting rates may be towards the middle of the year,” he said.
Outside of the U.S., Mr. Roubini has issued a warning to central banks in Europe, urging them to continue raising interest rates in order to mitigate the risk of "stagflation."
Mr. Roubini is a professor of economics and international business at New York University’s Stern School of Business. $ProShares UltraPro Short QQQ ETF(SQQQ.US)$ $ProShares UltraPro QQQ ETF(TQQQ.US)$ $S&P 500 Index(.SPX.US)$ $Nasdaq Composite Index(.IXIC.US)$ $Dow Jones Industrial Average(.DJI.US)$