Trump is not yet in power, but the way the world economy is going on around him

Trump is not yet in power, but the way the world economy is going on around him

 Donald Trump will be sworn in as the President of the United States on January 20.  Although there is still about a month left for his second term, the entire world economy has already started racing to adapt to the 'Trump policy'.  The policies he has already announced to protect business in his country are already beginning to have an impact in various countries.

 A minister in Canada resigned this week and the fall of the country's government seems imminent.  The US central bank has said it will cut interest rates fewer times than it had planned. 

Cryptocurrencies have reached a boom.  And the countries which spend their days in fear of imposing additional duties on export products in the United States, they have started to think of alternatives.

 From Ottawa to Frankfurt and Tokyo, central banks are busy with year-end meetings to decide the monetary policy of the Trump era.  Meanwhile, the US central bank Federal Reserve cut interest rates as expected on Wednesday.  But uncertainty about what will happen when Donald Trump takes office as the 47th president in the new year only grows.

Federal Reserve officials have not only backed away from plans to cut interest rates to curb lingering inflation, but are now thinking about going one step further.  Fed Chairman Jerome Powell said some at the bank were wondering how Trump's planned tariffs, tax cuts and immigration controls would affect their policies.

 On the bright side, US central bank officials think growth will be stronger next year than expected, Reuters reported.  But they also think that inflation will increase as well.  As a result, Jerome Powell said to be "cautious" about further cuts in interest rates.  But because of that, the share price has started to fall again.

 Jerome Powell also asked the market to keep an eye on interest rate cuts.  As a result, the Fed is expected to cut interest rates only once in 2025.

 Japan kept its ultra-low policy interest rate on Thursday among Asian countries.  The Bank of Japan has considered Trump's policies in this regard.  It is believed that Trump's policies on Japan's export-dependent economy could pose a threat.  A statement from the Bank of Japan said, "There is great uncertainty regarding the economic and price situation in Japan."

A Reuters poll of Japanese businesspeople last week found that nearly three-quarters of participants thought Trump's policies would have a negative impact on their business operations.  The Bank of Japan has probably taken this into account.  Japan is the only country in the developed world that is still taking contractionary measures.

 The US Fed recently cut interest rates.  Earlier, the European Central Bank and the Bank of Canada cut interest rates.  Both central banks were expected to cut interest rates several times in 2025 as economic activity in Europe and Canada weakened.

 However, European Central Bank President Christine Lagarde is not saying anything clearly about whether she will cut interest rates again.  But he stressed the risk of slowing growth.  He is more concerned about the trade tensions that will arise especially during the Trump era.

disaster

 Donald Trump may still be on the fringes of Fed thinking, but the Republican was at the very center of what happened in Ottawa.  Finance Minister Chrystia Freeland resigned after falling out with Prime Minister Justin Trudeau over how to deal with potential tariffs on Canadian exports by the next administration of the neighboring United States.

 Trump said last month that he would impose 25 percent tariffs on goods from the two countries if Canada and Mexico do not take steps to limit the entry of immigrants and the painkiller fentanyl into the United States.  Chrystia Freeland thinks the threat of new US tariffs could be a big threat to her country.

 On the other hand, Fed Chairman Jerome Powell has poured water on the excitement that is going on with the cryptocurrency Bitcoin.  Trump wants a strategic reserve of bitcoins to be created.  But Powell says they have no legal authority to build bitcoin reserves.  He added that the Fed has no plans to change the law to build such reserves.

 "This is something that Congress can work on," Jerome Powell said.  But we are not thinking about changing the law at the Fed.''