February 8, 2017
Political uncertainty is exerting pressure on global growth, according to information released by the Federal Reserve Bank of Dallas. Specifically, concerns over U.S. policy shifts on trade and globalization, combined with China’s deepening debt and inflation in advanced economies is keeping the global GDP at “lackluster,” with the outlook being “uneven.” The Dallas Fed indicated that the emerging economies are the ones taking a hit, though at this point, volatility among those economies has remained “subdued.”
But uneasy apprehension exists about policy in China, and the U.S. uncertainty about trade and fiscal policy under the new administration is expected to create monetary policy divergence between the United States and other advanced economies. The end result will most likely be a stronger U.S. dollar. Additionally, advanced economy protectionism, along with political strife, is also providing a negative global outlook.
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