Thursday, November 10, 2016

Trump entered the White House to the Federal Reserve's rate hike plan call into question

There are comments that, Trump won the United States presidential election, global markets had found that the Federal Reserve will soon raise interest rates, then continue to slowly raise interest rates in the coming years the core idea, and also call into question. This article has some references.
Trump financial markets in shock the news of winning, the US dollar and stock market slump, gold and safe-haven sovereign debt has been rising, reflecting market worry about Trump's policies will lead to a long period of global uncertainty.

Market turmoil has led to the suspension of action of the Federal Reserve in the past, like in 2015, China stock market crash, and in June of this year United Kingdom back Ou Gong after market shocks.

Investors would like to see the Democratic candidate Hillary Clinton took office that she will maintain the status quo, more able to maintain stability at home and abroad.

Trump promised to reverse or renegotiation of international trade agreements, which could trigger a wave of protectionism, suspend the fledgling global economic recovery. His economic plan advocating massive tax cuts, many economic analysts estimate this will lead United States budget deficit rose sharply.

"This improves the chances of December the Federal Reserve won't raise interest rates," comments Moody's Analytics Chief Economist Mark Zandi said Trump won on Tuesday.

Trump victory casts doubt on the future of the Federal Reserve President Janet Yellen. Trump has accused the Fed of keeping interest rates low to help Obama, and suggested that may be advised after the expiration of his term in January 2018 replace Janet Yellen, which analysts have speculated whether Yeh will resign in advance.

Since Trump did not come up with details of the economic plan, which the Federal Reserve and the uncertain future interest rate path.

Trump has proposed giving States more federal funding for free reign in poor health care, but no more details. He also promised to cut personal and corporate tax rates, but some analysts questioned supported the plan's assumptions, as well as financial support for tax benefits.

Federal Budget Committee said this makes it difficult for them to estimate the Trump proposal, but estimates for the next 10 years will increase by $5.3 trillion federal debt.

Trump said his policies will drive a lot of business investment, creating 25 million jobs, so that the United States increase economic growth by about 1 time.

Trump said during a nomination in a speech to supporters, "we have a good economic plan, we will raise the economic growth rate 1 time and the United States as the world's most powerful economies. ”

Voters vote on election day when the United States Federal Reserve Bank of Chicago President Charles Evans said the Fed concerned about volatility in the markets, and fiscal policy will change after the election.

Evans said the Fed won't succumb to criticism, in accordance with its duty to promote full employment and price stability policies. "We need to remove short-term political pressures," he told reporters in New York.

Impact of protectionist policies in the initial Trump may not be entirely negative. Barry Eichengreen, an economist said earlier this year, while tariffs have ignited the risk of trade war and geopolitical tensions, but the initial effect may be to improve United States wages and inflation, which to some extent is the Federal Reserve's loose monetary policy has so far tried to achieve things.

Moody's Analytics Chief Economist Mark Zandi (Mark Zandi) team expects the full implementation of Trump in the areas of trade and immigration proposal could increase the inflation rate, eventually triggered the Federal Reserve rate hikes, and the recession, which some investors feared.

"His tax cuts could increase the budget deficit, and trade sanctions would disrupt global trade. This could lead to economic recession, "National Securities Chief market analyst Donald Selkin said in New York.

Huck, President of the Federal Reserve Bank of Philadelphia on October 13, said fed policy changes that may occur after the election will have to be monitored. United States unemployment rate below 5%, or large-scale fiscal stimulus will push inflation higher.

"If there is a policy that may have a negative effect, that we will have to deal with, we will have to respond," hack said. (Source: Reuters in Chinese)

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