The US’s aim to shake up the global trade marketplace and rein in its deficit will erode the world’s single-biggest easing mechanism.
There are weeks where decades happen, said Lenin. We could be on the threshold of such a period if the US succeeds in redressing imbalances with China, Mexico, the EU and other trade partners. That’s a world in which the supply of dollar reserve assets declines, leading to a weaker US currency, stronger foreign currencies, and higher Treasury yields.
