This is via Chief Economist at Moody's Analytics, Mark Zandi:
- The Trump administration’s policies are set to severely diminish the economy, not only for the next few months but for years. The administration’s trade war is undermining the global safe-haven status of the U.S., which has provided incalculable benefits, including our economy’s exceptionalism.
Its part of a thread, in summary:
Investors trust the U.S. due to stable laws and predictable governance.
Trump’s erratic tariff policy undermines that stability and process.
Political pressure on the Fed threatens its independence and risks inflation.
Loss of credibility could push Treasury yields and lending rates higher.
CDS spreads on U.S. debt show growing doubts about creditworthiness.
The trade war has hurt U.S. credibility, but there’s still time to limit the fallout.
