Image of Nouriel Roubini courtesy of the World Economic Forum.

Renowned economist and New York University professor Nouriel Roubini is warning that the inability of US leaders to hash out an agreement to raise the debt ceiling will likely impact markets and reduce confidence in the dollar over the longer-term.

In an interview with Bloomberg TV on Wednesday from the sidelines of the Qatar Economic Forum in Doha, Roubini said, “They may get to the last hour before there’s an agreement. Or it’s possible they don’t reach an agreement. If that doesn’t happen, then the market is going to crash.”

Roubini, who earned his “Doctor Doom” moniker from Wall Street after predicting the financial crisis of 2008-2009, said that geopolitical tensions as well as deteriorating relations between the US and China were already set to be major challenges for the economy this year.

Now, on top of that, investors are confronted with Treasury Secretary Janet Yellen warning that the chances the United States will pay its obligation after June 1st are “quite low.” She warned that unless Congress can strike a deal to raise the debt ceiling above the $31.4 trillion borrowing limit it presently has, the United States will be forced to default on “some bills,” shortly afterwards.

Set by Congress, the debt ceiling is the maximum amount the country is allowed to borrow to pay off its debts.

Although President Joe Biden and Republican lawmakers have been holding talks to reach a deal to raise the debt ceiling so the United States will not default, on Monday talks once again failed to produce an agreement. Although they were only ten days away from a possible default, they vowed to continue negotiations.

Before they will approve raising the limit, Republicans are demanding the government reduce its spending, however President Biden is insisting the increase in the debt ceiling occur in a “clean” bill, keeping the two issues separate.

In a statement after what Biden called a “productive” meeting, he said, “We reiterated once again that default is off the table and the only way to move forward is in good faith toward a bipartisan agreement.”

The US has been close to defaulting several times in the past. In 2011, the agreement on raising the debt ceiling was reached only days before the nation had fully exhausted its borrowing capacity, and would have defaulted. In the aftermath of a subsequent downgrading of the credit rating of the nation’s debt, by Standard & Poor’s, the stock market crashed, with the Dow losing 17%.