Economics
Trump, Fed Headed for Clash Amid Dollar Surge, Economists Say
- Leading economists Gordon, Eichengreen speak in Paris
- Tight labor market, rising inflation will push up rates
Fed, Fiscal Policy, and Unwinding the Balance Sheet
This article is for subscribers only.
Donald Trump and the U.S. Federal Reserve are heading for a collision that will almost certainly result in a stronger dollar, two leading economists said.
“I see a likelihood for a major clash developing in the next year, year and half, between the Trump administration’s desire to go for 3 to 4 percent growth and the growing attention of the Fed to emerging inflation in their own 2 percent mandate,” Northwestern University’s Robert J. Gordon told a conference in Paris on Monday. Barry Eichengreen of the University of California Berkeley sees “double-digit” dollar appreciation as a possible consequence of Trump’s fiscal stimulus, tax reform and protectionist trade policy.