How Trump Could Help the Fed

Everyone has a lot to digest in the wake of Donald Trump's presidential victory, but for markets one question looms large: What should it change in the policies of the world's most powerful central bank, the U.S. Federal Reserve? The answer differs depending on whether you’re looking at the next few months or the next several years.

In the near term, the Fed (and probably other central banks) will perceive Trump’s election as a new source of uncertainty. His platform contains a lot of standard Republican fare such as lowering taxes and reducing regulation -- measures that, while they might not be as great for growth as Trump hopes, present no immediate economic threat. Much less conventional, though, is his view that trade has hurt America. This idea stands in exact opposition to the development of the global economic order since the end of World War II, and generates immense uncertainty surrounding how it will translate into policy, how the rest of the world will respond and what the effect on global growth will be.