Central Banks
The US-Euro Rates Gap That Triggered Trump’s Fed Bashing Is Set to Widen Again
- Faster US economy points to rate premium and stronger dollar
- ECB rates seen undercutting Fed by most since first Trump term
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America’s surprisingly robust economy has raised expectations that US interest rates will stay high compared to Europe next year.
That may sound like a good problem to have, but it spells trouble for President-elect Donald Trump’s trade ambitions. The gap between US and euro zone interest rates, which is set to widen, has already driven up the value of the dollar and could undercut his efforts to boost US exports.