The Federal Reserve's commitment to loose monetary policy is likely to lead to asset and equity bubbles in the next two years which could be worse than the previous crisis, renowned economist Nouriel Roubini said in an opinion piece for Project Syndicate.
Roubini, co-founder and chairman of Roubini Global Economics famously dubbed Dr Doom for his accurate prediction of the 2008 financial crisis, wrote earlier this week that "the problem is that theFed's liquidity injections are not creating credit for the real economy, but rather boosting leverage and risk-taking in financial markets."
"The issuance of risky junk bonds under loose covenants and with excessively low interest rates is increasing; the stock market is reaching new highs, despite the growth slowdown; and money is flowing to high-yielding emerging markets," he added.
According to Roubini, a slow exit from the Fed's quantitative easing (QE) policy would be similar to 2004, when the central bank began to slowly raise rates. Between June 2004 and December 2007, the Fed raised rates in 25 basis point increments. The gradual rate hikes were blamed for keeping monetary policy accommodative for too long and worsening the housing bubble.
(Read More: Bernanke Watch: Is He Eyeing the Exit?)
On Wednesday, the Fed held fast to its ultra-accommodative monetary policy after its policy meeting because of what board members described as an economy weakened by fiscal policy. The Fed will continue to buy $85 billion a month in bonds under its QE3 program.
(Read More: Fed Keeps Interest Rates Low. Continues Bond Buying Program)
According to Roubini, the Fed's program and that of similar programs from other central banks have far-reaching consequences with the troubled euro zone periphery even gaining from the increased liquidity.
Roubini said that even when interest rates begin to rise, which he predicts will be in 2015, it will be slow and steady.
But Roubini doesn't prescribe an alternative. Instead, he said, that moving too quickly "would crash asset markets and risk leading to a hard economic landing."
(Read More: Roubini: Brace for Market Correction Later This Year)
According to him, markets should be braced for turmoil once monetary tightening starts and further turbulence once tightening is finished.
"The exit from the Fed's QE and zero-interest-rate policies will be treacherous: Exiting too fast will crash the real economy, while exiting too slowly will first create a huge bubble and then crash the financial system. If the exit cannot be navigated successfully, a dovish Fed is more likely to blow bubbles."
—By CNBC's Shai Ahmed; Follow her on Twitter @shaicnbc.