If Fed follows Trump, US assets would be dented
Trump's policy jawboning has been persistent enough for investors to start factoring its effects into their trading
Washington
DONALD Trump may want to watch what he wishes for. If Federal Reserve boss Jerome Powell does what the president wants, American assets could lose their appeal as a global haven.
Strategists warn that more than just the central bank's credibility would be hurt if the Fed were to put on the brakes on monetary policy tightening. Mr Trump would get his desire for a weaker dollar, but rising inflation expectations would dent the perceived safety of US assets and eventually boost longer-term financing costs for the government and American consumers. On the other hand, global liquidity and growth could receive a lift, at least initially, and emerging markets that have been maligned by Mr Trump could benefit.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Biden vetoes bid to repeal US labour board rule on contract, franchise workers
Economic leaders of South Korea, Japan, China say FX volatility is a risk
US automakers win extension on use of Chinese graphite in EV tax credits
US service sector contracts in April; price pressures up
Thaksin’s daughter calls central bank independence an ‘obstacle’
US jobs growth slows in April; jobless rate up to 3.9%