April 25, 2025 • 7 mins
Nouriel Roubini, chair and CEO of Roubini Macro Associates, says US exceptionalism will remain despite bad trade and immigration policies. He speaks with Bloomberg's Alix Steel and Romaine Bostick
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news all.
Speaker 2 (00:08):
Are you here for more, Nourreel Rubini, chairman and CEO
of Verbini Macro Associates, who's also not psyching himself out, Noreel,
are you on the positive camp here? And if so, how.
Speaker 3 (00:17):
Well I mean in the positive camp in the following sense.
I've been arguing for weeks now that tech trum start
because there's a revolution coming from AI and other does
and industry of the future. It's an AI, robotic automation,
a siliconductor, fintech, defence tech, green tech, act tech, you
(00:39):
name its space exploration quantum. This thing is going to
increase US potential growth from the current two percent to
a level I expect by the end of this decade
closer to four percent. So two hundred business points increasing
productivity growth instead, even in the worst scenario on trade,
domestiction to migration, and we're going to escalate the potential
(01:02):
heat to potential growth could be maybe fifty business points.
Speaker 4 (01:06):
So the ratio between two hundred.
Speaker 3 (01:07):
Business points up because of technology and negative fifty basis
points is four to one. So tech Trump studies and
therefore the US American exceptionalist is going to remain in
spite of bad trade policies, in spite of bad migration policies.
So in that sense autistic that not just in the
(01:29):
short run, those of the medium term. We're going to
avoid the severe reception and you have to remain strong.
Speaker 2 (01:36):
And you know, so tech trumps tariffs and at the
same time, like for health Ham, it was the regulation
trumping tariffs as well. At this point, what about the
issues with the dollar in the back end of the curve,
so higher yields and weaker dollar, and if we move
out of dollars a reserve currency, even on a margin,
how do you factor that in?
Speaker 3 (01:54):
Well, regardless the dollar, there are different types of investors.
There are those that are fixing investors, foreign reserve asset
managers of the wealth funds where in fixed income some
of them are worried about the dollar because of course
we have undermined the credibility of the US dollar. If
I'm right that we're going to go from a two
to four percent growth in the US, there will be
(02:16):
a massive capex an investment boom that's already occurring right now.
It's a mac seven hyperscalers firms in a NASDAC but
even nontech firms have to have an AI strategy and
how they're going to do less investment because of because
of trade restriction, No way. So we have massive tail
winds imply larger investments shore GDP and capital inflows that
(02:40):
are going to be FDI, green Field and brown Field,
and portfolio investment into the equity market. So the dollar
can weakend because fixed income folks are nervous about US
meddling with the reserve currency role of the dollar. But
that massive inflow of capital to finance this investment boom
is going to imply get Any weakening of the dollar
(03:02):
is going to be very gradual. I don't think there'll
be a collapse in the value of the dollar, and
I don't think that the US dollar is going to
be undermined to any significant extent as a global reserve currency. Yes,
the Chinese and our enemies are going to try to
create alternative payment rails that are not based on the
US dollar substitute for sweets and so on, but that'll
(03:23):
be a very very gradual process.
Speaker 1 (03:26):
I am curious though, as we go through this process,
Doctor Rubini, there's been a lot of talk because not
just with the dollar, but when you talk about the
technological advancements or the potential there. These two aren't necessarily
divorced from one another. And someone was bringing up kind
of you go back, you look at the other big
sort of the Industrial Revolution, obviously the digital revolution a
few decades ago, and this idea that it wasn't just
(03:49):
about one country leading the charge. In fact, a lot
of the countries that led the charge ended up not
being the primary beneficiaries down the road, Great Britain.
Speaker 4 (03:56):
For example.
Speaker 1 (03:57):
With the Industrial Revolution, of course, most of the benefit
it ended up being to what within a burgeon in
the United States of America. Is there a chance that
we could see that play out again where China and
deep seek and everything else affiliated with that becomes the
real beneficiary.
Speaker 4 (04:13):
I don't think so. For the following reason.
Speaker 3 (04:15):
In these twelve Industries of the future, US currently is
number one, China is number two in all of them
but green tech and electric vehicles, the mobility revolution. Secondly,
in the past innovations, where loger itmay, they've spurt of growth,
say after the first Internet revolution in the nineties, US
(04:35):
god goes from one to three, then it flattens out
and goes back to two. Instead, the nature of this
revolution in technology lead by eye is exponential. US growth
today two percent, four percent by the end of this decade,
six percent by the end of the next decade. When
it's exponential, you have a first mover advantage, and whether
(04:57):
it's first because of economy of scale and net remains
first and whoever is second remains a second.
Speaker 4 (05:04):
China is going to do well, but.
Speaker 3 (05:05):
The idea they're going to catch up with US, I
think is totally far fetched.
Speaker 4 (05:09):
And everybody else is not even number three or four.
Speaker 3 (05:12):
There are some pockets of excellence in Europe, in Israel,
in India, in Japan, in Taiwan, in South Korea, and
so on and so on. So in this game about
the technology of the future, US remains number one, China's
going to be number two, and everybody else is going
to be adopting this new technology. And by the way,
you don't need to be innovating. Even if you adopt
(05:34):
the technology, you'll have some productivity growth. You know, after all,
in sub soual And Africa there has never been any
iPhone or smartphone produced, but even a poor farmer using
a smartphone can do lots of business transaction, selling the crop, ensuring, financial,
and so so upon. In the US is going to
remain number one, Chinese number two, and everybody is going
(05:55):
to be behind but adopting either the technology of the
US or those of China and innovating either with US
or with China. But you're going to get first mover advantage.
The second ones are not going to catch.
Speaker 1 (06:08):
Ups in terms of global economic conditions and whatever structural
changes are taking place in Norriel. Do you get a
sense here that the lack of international cooperation, at least
as it stands right now visa these what we saw
over the last few decades, that that might actually be
a benefit to the United States or could it actually
hamper us?
Speaker 3 (06:29):
Well, the reality is that the global system is going
to be divided in two areas. One with US is
friends and allies, and some of the countries in the
global South, said the Indians of the world are going
to be following the economic, monetary, trading, financial, technological, and
I would say even the military and security system of
(06:50):
the United States. Instead, China, Russia, North Korea, Iran, Cambodia,
Pakistan and a few others are going to be in
the technological and economic and trading area.
Speaker 4 (07:03):
Of China.
Speaker 3 (07:04):
Now, if we reach an agreement on China to partially
escalate with the risk the relationship on what's strategic, high
tech and related critical things like rare earth medals and
things are critical to us and to them, but we
still do business on the stuff is law value added
or media value added? After all, we don't need to
(07:24):
produce in US t shirts or cheap toys, right, that
doesn't make any sense. So we could have a ground
bargain in which we decouple fully on technology and that's
the risking and still we do some trade and then
everybody else Europe, Asia, the Global CEU can do business
with the US, with the China apart from technology, in
which led to choose either American AI or Chinese EE.
Speaker 4 (07:48):
That's going to be a full decappening and.
Speaker 1 (07:51):
You're already starting to see those choices being made. Doctor Rabini,
really appreciate you taking time for us. Neurial Rabini, of course,
the chairman and CEO over at Rubini Macro Associates
Bloomberg Audio Studios, podcasts, radio news all.
Speaker 2 (00:08):
Are you here for more, Nourreel Rubini, chairman and CEO
of Verbini Macro Associates, who's also not psyching himself out, Noreel,
are you on the positive camp here? And if so, how.
Speaker 3 (00:17):
Well I mean in the positive camp in the following sense.
I've been arguing for weeks now that tech trum start
because there's a revolution coming from AI and other does
and industry of the future. It's an AI, robotic automation,
a siliconductor, fintech, defence tech, green tech, act tech, you
(00:39):
name its space exploration quantum. This thing is going to
increase US potential growth from the current two percent to
a level I expect by the end of this decade
closer to four percent. So two hundred business points increasing
productivity growth instead, even in the worst scenario on trade,
domestiction to migration, and we're going to escalate the potential
(01:02):
heat to potential growth could be maybe fifty business points.
Speaker 4 (01:06):
So the ratio between two hundred.
Speaker 3 (01:07):
Business points up because of technology and negative fifty basis
points is four to one. So tech Trump studies and
therefore the US American exceptionalist is going to remain in
spite of bad trade policies, in spite of bad migration policies.
So in that sense autistic that not just in the
(01:29):
short run, those of the medium term. We're going to
avoid the severe reception and you have to remain strong.
Speaker 2 (01:36):
And you know, so tech trumps tariffs and at the
same time, like for health Ham, it was the regulation
trumping tariffs as well. At this point, what about the
issues with the dollar in the back end of the curve,
so higher yields and weaker dollar, and if we move
out of dollars a reserve currency, even on a margin,
how do you factor that in?
Speaker 3 (01:54):
Well, regardless the dollar, there are different types of investors.
There are those that are fixing investors, foreign reserve asset
managers of the wealth funds where in fixed income some
of them are worried about the dollar because of course
we have undermined the credibility of the US dollar. If
I'm right that we're going to go from a two
to four percent growth in the US, there will be
(02:16):
a massive capex an investment boom that's already occurring right now.
It's a mac seven hyperscalers firms in a NASDAC but
even nontech firms have to have an AI strategy and
how they're going to do less investment because of because
of trade restriction, No way. So we have massive tail
winds imply larger investments shore GDP and capital inflows that
(02:40):
are going to be FDI, green Field and brown Field,
and portfolio investment into the equity market. So the dollar
can weakend because fixed income folks are nervous about US
meddling with the reserve currency role of the dollar. But
that massive inflow of capital to finance this investment boom
is going to imply get Any weakening of the dollar
(03:02):
is going to be very gradual. I don't think there'll
be a collapse in the value of the dollar, and
I don't think that the US dollar is going to
be undermined to any significant extent as a global reserve currency. Yes,
the Chinese and our enemies are going to try to
create alternative payment rails that are not based on the
US dollar substitute for sweets and so on, but that'll
(03:23):
be a very very gradual process.
Speaker 1 (03:26):
I am curious though, as we go through this process,
Doctor Rubini, there's been a lot of talk because not
just with the dollar, but when you talk about the
technological advancements or the potential there. These two aren't necessarily
divorced from one another. And someone was bringing up kind
of you go back, you look at the other big
sort of the Industrial Revolution, obviously the digital revolution a
few decades ago, and this idea that it wasn't just
(03:49):
about one country leading the charge. In fact, a lot
of the countries that led the charge ended up not
being the primary beneficiaries down the road, Great Britain.
Speaker 4 (03:56):
For example.
Speaker 1 (03:57):
With the Industrial Revolution, of course, most of the benefit
it ended up being to what within a burgeon in
the United States of America. Is there a chance that
we could see that play out again where China and
deep seek and everything else affiliated with that becomes the
real beneficiary.
Speaker 4 (04:13):
I don't think so. For the following reason.
Speaker 3 (04:15):
In these twelve Industries of the future, US currently is
number one, China is number two in all of them
but green tech and electric vehicles, the mobility revolution. Secondly,
in the past innovations, where loger itmay, they've spurt of growth,
say after the first Internet revolution in the nineties, US
(04:35):
god goes from one to three, then it flattens out
and goes back to two. Instead, the nature of this
revolution in technology lead by eye is exponential. US growth
today two percent, four percent by the end of this decade,
six percent by the end of the next decade. When
it's exponential, you have a first mover advantage, and whether
(04:57):
it's first because of economy of scale and net remains
first and whoever is second remains a second.
Speaker 4 (05:04):
China is going to do well, but.
Speaker 3 (05:05):
The idea they're going to catch up with US, I
think is totally far fetched.
Speaker 4 (05:09):
And everybody else is not even number three or four.
Speaker 3 (05:12):
There are some pockets of excellence in Europe, in Israel,
in India, in Japan, in Taiwan, in South Korea, and
so on and so on. So in this game about
the technology of the future, US remains number one, China's
going to be number two, and everybody else is going
to be adopting this new technology. And by the way,
you don't need to be innovating. Even if you adopt
(05:34):
the technology, you'll have some productivity growth. You know, after all,
in sub soual And Africa there has never been any
iPhone or smartphone produced, but even a poor farmer using
a smartphone can do lots of business transaction, selling the crop, ensuring, financial,
and so so upon. In the US is going to
remain number one, Chinese number two, and everybody is going
(05:55):
to be behind but adopting either the technology of the
US or those of China and innovating either with US
or with China. But you're going to get first mover advantage.
The second ones are not going to catch.
Speaker 1 (06:08):
Ups in terms of global economic conditions and whatever structural
changes are taking place in Norriel. Do you get a
sense here that the lack of international cooperation, at least
as it stands right now visa these what we saw
over the last few decades, that that might actually be
a benefit to the United States or could it actually
hamper us?
Speaker 3 (06:29):
Well, the reality is that the global system is going
to be divided in two areas. One with US is
friends and allies, and some of the countries in the
global South, said the Indians of the world are going
to be following the economic, monetary, trading, financial, technological, and
I would say even the military and security system of
(06:50):
the United States. Instead, China, Russia, North Korea, Iran, Cambodia,
Pakistan and a few others are going to be in
the technological and economic and trading area.
Speaker 4 (07:03):
Of China.
Speaker 3 (07:04):
Now, if we reach an agreement on China to partially
escalate with the risk the relationship on what's strategic, high
tech and related critical things like rare earth medals and
things are critical to us and to them, but we
still do business on the stuff is law value added
or media value added? After all, we don't need to
(07:24):
produce in US t shirts or cheap toys, right, that
doesn't make any sense. So we could have a ground
bargain in which we decouple fully on technology and that's
the risking and still we do some trade and then
everybody else Europe, Asia, the Global CEU can do business
with the US, with the China apart from technology, in
which led to choose either American AI or Chinese EE.
Speaker 4 (07:48):
That's going to be a full decappening and.
Speaker 1 (07:51):
You're already starting to see those choices being made. Doctor Rabini,
really appreciate you taking time for us. Neurial Rabini, of course,
the chairman and CEO over at Rubini Macro Associates
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