This is via Chief Economist at Moody’s Analytics, Mark Zandi:
- The Trump administration’s policies are set to severely diminish the economy, not only for the next few months but for years. The administration’s trade war is undermining the global safe-haven status of the U.S., which has provided incalculable benefits, including our economy’s exceptionalism.
Its part of a thread, in summary:
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Investors trust the U.S. due to stable laws and predictable governance.
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Trump’s erratic tariff policy undermines that stability and process.
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Political pressure on the Fed threatens its independence and risks inflation.
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Loss of credibility could push Treasury yields and lending rates higher.
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CDS spreads on U.S. debt show growing doubts about creditworthiness.
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The trade war has hurt U.S. credibility, but there’s still time to limit the fallout.
This article was written by Eamonn Sheridan at www.forexlive.com.
