The 2024 presidential election is only one year away. The U.S. economy has seen a multitude of headwinds, with much speculation of a potential recession.

NYU Stern School of Business Professor Emeritus Nouriel Roubini joins Yahoo Finance Senior Columnist Rick Newman to discuss the possibilities of what the economy will look like as election season starts to heat up. Roubini warns: "Even a short and shallow recession will be very damaging for Biden, because a recession during an election year, of course, his popularity will further decline."

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Video Transcript

RICK NEWMAN: So, we're not going to ask you to be a political prognosticator, but you are an economic prognosticator. What do you think is going to happen in the economy during the next 12 months leading up to election day? Which is basically a year from now.

NOURIEL ROUBINI: Well there are-- [CLEARS THROAT] sorry-- there are three scenarios about the economy. One, right now, looks highly unlikely. A real, say, hard landing, severe recession, and a financial crisis. Six months ago with the banking problem, that was a risk. A year ago, with rising inflation, commodity prices-- that was a risk. That tail risk is lower. So the question is whether the economy is going to have a soft landing, where you go back to 2% inflation without any recession, or whether it's going to be a softish, bumpy landing, where in order to achieve 2% inflation, you're going to have a short and shallow recession.

I would say that the jury is still out on that. The economic data that actually, right now, looks like in the direction of a soft landing. Growth is still above potential, inflation has been falling, and therefore, we're going in the right direction. But, interest rates are higher-- higher for longer-- that may slow down the economy. There are geopolitical risks that might lead to a spike in energy prices, and therefore, there are factors that could lead us to a short and shallow recession.

And now, from a political point of view, even a short and shallow recession would be very damaging for Biden. Because if there was a recession during an election year, of course his popularity will further decrease.