Part 8/9:
Should Trump’s presidency culminate in diminished Fed independence and a return to loose monetary policy, the repercussions could extend far beyond U.S. borders. Inflation, once reestablished, might lead to a tightening of rates by subsequent administrations, triggering economic fallout for emerging economies dependent on dollar-denominated debt.
While current inflation rates appear manageable at around 2%, market reactions indicate lingering skepticism among investors regarding the sustainability of this stability. Rising interest on government debt, as observed recently due to changes in Fed policy, signals market apprehension about future monetary decisions.