After the OECD issued a downbeat outlook for global growth citing the trade dispute between the US and China, an expert tells RT’s Boom Bust that the correlation has become ‘obvious’ not only to the regulator, but to the world.
“It’s become blindingly obvious… Economists all over the world are [saying] that there is a relationship between the diminished prospects for growth and Trump’s trade war,” said Jeffrey Tucker of the American Institute for Economic Research.
He stated that the situation is far from the normal cyclical behavior of markets switching from periods of growth to recessionary periods. Instead, he claims, “what we’re seeing is a very violent interruption of global trade flows that’s disrupting capital markets all over the world.”
Tucker emphasized that the global uncertainty is also heated by reliance on the US Federal Reserve, which has not issued any agenda regarding the way it’s planning to deal with the pessimistic growth prospects.
“The Fed is under serious pressure to bail out the US economy – and even the global economy – from the consequences of the trade war. And nobody really knows what the Fed is going to do. Also, it is not in the policy mandate of the Fed to fix the problems created by politicians and their economic policies… to repair the damage caused by the Trump administration, but it’s obvious, too, that the Fed… understands it has to intervene here,” the expert said.
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