Ireland ‘risks mother of all recessions’ if Trump wins battle to lower interest rates, says economist
An economist has warned Ireland "risks the mother of all recessions" if Donald Trump wins his battle to lower interest rates.
The US president has been engaged in a battle to sharply reduce interest rates with the chair of the US central bank, Jerome Powell.
Speaking in the Sunday Independent, Dr Alan Ahearne said if Trump was successful, he outcome would be worse than anything experienced in the last economic downturn.
"Stock markets would fall, credit markets would tighten up, just like in 2008. Borrowing and lending would freeze.
"This is huge,” he added. “If you get a panic in the US bond market, it will for certain cause a deep recession in the US and a deep recession all over the world.
“The main impact on us will be a global economy in recession, and that’s going to affect economic growth and it will push the Irish economy into recession.”
Trump has made it very clear that he is no fan of Fed chief Jerome Powell who is due to step down from his post in May
Powell has publicly pushed back and warned that the independence of the Fed is at stake, and senior central bank figures from around the world have also expressed their support for Powell.
Writing in the Irish Times on Saturday, David McWilliams said: "Donald Trump doesn’t want to debase money completely, just a little bit, just enough to keep the price of money – the rate of interest – artificially low, to stimulate more money printing, just enough to fool the people for long enough into thinking they are richer than they actually are.
"Buoyed up by the temporary sugar rush of cheap money, which will push up the value of their homes, their stock portfolio and make their loans that bit cheaper to service, the American middle class will ascribe their creature comforts to the president and vote for him in the upcoming mid-term elections.
