‘Significant long-term scarring’ in services will limit pent-up consumer demand and suppress inflation, economist Stephen Roach predicts

‘Significant long-term scarring’ in services will limit pent-up consumer demand and suppress inflation, economist Stephen Roach predicts

Economist Stephen Roach said Monday he believes Wall Street is overestimating a consumer comeback.

According to the Yale University senior fellow, demand will snap back like a rubber band later this year as the V-shaped recovery loses momentum.

"With vaccines rushing out together with a lot of stimulus, you can just sense this instant gratification of a long-deferred pent-up demand," Roach told CNBC's "Trading Nation." "But as I look at the numbers, you know, most of that surge has probably already occurred."

He's building part of his case on the consumer durables share of GDP data.

"We're back to levels of consumer durables that we haven't been at in about 13, 14 years," said Roach. "We've done the pent-up demand to a large extent, and it looks like it's borrowing from growth that might have otherwise occurred in the second half of this year or early 2022."

Roach said he does not believe that as more people get vaccinated, they'll go from spending wildly on furniture and cars to spending wildly on restaurants and theaters.

"These face-to-face activities are still lagging in terms of employment and demand," he said. "Even as we get vaccines, I think there is going to be some significant long-term scarring here. ... I