"Apocalypse Doctor" Roubini's latest analysis: Trump is more likely to escalate war with Iran rather than back down.

Renowned economist Nouriel Roubini, known as the "Dr. Doom" in the global financial community due to his persistent extreme pessimistic forecasts, predicts that U.S. President Donald Trump is more likely to escalate the war with Iran to achieve victory, rather than retreat and risk more serious consequences for the economy and international order. Speaking at an economic forum in Como, Italy, the former White House economist emphasized, "My baseline assessment is that the probability of escalation is over 50%. Although the risk of failure after escalation is smaller than the probability of success, it is still a huge strategic risk." As the CEO of Roubini Macro Associates, Roubini gained fame for his "doomsday predictions" during the 2008 global financial crisis, but he has shown a relatively optimistic attitude towards the Iran war. He analyzed at the Chernobio Ambosditi seminar, "If the U.S. and Israel further escalate the conflict, it is more likely to prompt the collapse of the Iranian regime, so even though oil prices may rise in the short term, the outcome will be better in the medium to long term. This means that both Trump and Israeli Prime Minister Benjamin Netanyahu have a motive to escalate the conflict and try to achieve victory." In fact, Iran and Israel continued to exchange missiles on Friday, with Iran also attacking multiple Gulf countries. Just a few hours ago, Trump once again postponed the final deadline for Iran to agree to reopen the Strait of Hormuz, otherwise its power facilities could face attacks. Roubini warned that a prolonged war would damage the global economy, particularly with the risk of "tail risk" - if the U.S. and Israel escalate the conflict, Iran may increase its attacks on oil facilities, eventually leading to a repeat of the energy crisis of the 1970s. Currently, U.S. military actions against Iran have caused many countries to lower their economic growth expectations and prepare for energy-driven inflation. He pointed out, "Even if the war ends tomorrow, oil prices cannot return to pre-war levels," but a 10% to 15% increase "is not yet a catastrophic shock." As oil and gas costs continue to rise, confidence indicators have plummeted, with countries like Germany and Italy weighing their economic growth prospects. Last week, the European Central Bank issued a more pessimistic outlook for the European economy. When asked about the impact on monetary policy, Roubini suggested that the European Central Bank may have to raise interest rates in April or even June, and the Bank of England may also have to do the same. He also pointed out that the Federal Reserve may find itself in a difficult position, with policymakers possibly forced to raise rates to avoid the risk of inflation expectations becoming unanchored. Reflecting on the delayed rate hike by the Federal Reserve in 2022, Roubini stated that it had almost lost credibility. With a new leadership at the Federal Reserve, Kevin Warsh is set to take over from Jerome Powell in May. He emphasized that the new Fed Chair cannot ruin their reputation at the beginning of their term, so they may have no choice but to raise rates.