Newsletter: A monthly brief of new insights on important economic, financial and policy issues.
Global Economic Dynamics
As in most matters, President Trump has taken an assertive, often belligerent, tone in addressing the issue of trade. He has talked of trade deals being the “worst ever,” and threatened to tear up trade agreements and dissolve long-term relationships often with long-standing allies. In his world, trade agreements should benefit the United States in general and U.S. jobs in particular, or at a minimum provide a level playing field on which U.S. business can compete.
At a May 2017 forum in Beijing, China’s President Xi Jinping expounded on the evolving opportunities for China’s Belt and Road Initiative (BRI)1
to connect with the development strategies of various other countries, specifically naming neighbors Russia, Kazakhstan, Vietnam, Laos, and Myanmar.
Fed Chair Janet Yellen’s recent Humphrey Hawkins testimony excited speculation that the Federal Reserve might raise the Fed Funds rate as soon as March. The normally reticent Fed Chair seemed to turn a skosh more optimistic, noting that the economy continued to make progress and “waiting too long [to raise interest rates] would be unwise.”
The decline of the Chinese yuan against the U.S. dollar is matched by its decline against the country’s Other Important Trading Partners Index despite a booming trade surplus.
Surprising progress on climate change highlights the opportunity offered by a new, incremental approach to emissions reductions.
China’s structural shift toward innovation and services parallels its push toward clean energy.
Harsh austerity has both increased Greece’s debt burden and suppressed its economy.
Greece and China are both highly leveraged but face wholly different challenges.
As economies age, good growth is harder to come by.
Stock prices are likely to flatten as lower unemployment rates signal a maturing cycle.
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