Quick Take: Former IMF Executive Says Trump Policies Now World’s Biggest Uncertainty
The world will continue to reel from the unpredictability of U.S. President Donald Trump and his policies, said former Deputy Managing Director of the International Monetary Fund.
“Trump policies are now the biggest uncertainties facing the world. It is because his policies lack clear details of execution, leading to unclear outcomes,” Zhu Min, also former Deputy Governor of the People’s Bank of China, told an audience at the Tsinghua PBCSF Global Finance Forum 2017 in Beijing over the weekend.
Zhu said that when the U.S. Treasury yield curve steepened late last year, the Chinese yield curve “unexpectedly” followed and steepened as well.
“That is incomprehensible,” Zhu said. “China didn't have a Trump. It says how interconnected the world is now. Such contagious impact cannot be underestimated.”
A yield curve steepens when the market expects rising inflation and stronger economic growth. That was the sentiment among investors during and after the U.S. presidential election. A Republican win led the market to expect high fiscal stimulus, deregulation and tax reform, all of which might require the government to issue more Treasury notes, thereby increasing inflationary pressures.
Echoing many currency analysts, Zhu added he expects the U.S. dollar to remain volatile, which will hurt the global economy.

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