Experts say the full suite of Donald Trump’s economic policies would fuel global inflation and interest rates and slow growth, delivering a huge policy headache to the Australian government and the Reserve Bank.
Donald Trump’s policy agenda could precipitate a global financial crisis and fuel inflation, one of the world’s leading analysts has warned, with fears Australians will suffer higher interest rates and a $36 billion hit to the domestic economy.
Giving evidence to a Senate hearing in Canberra, Reserve Bank assistant governor Christopher Kent said Trump’s policies such as tax cuts would probably mean higher US long-term interest rates and inflation, which would flow through to the global economy.“Because the US is such an important source of funding, and the demand by the government for borrowing is substantial, that’ll have upward effects on global interest rates,” he said.
“China is our biggest market for energy and resources. If they don’t sell as many goods, then the demand for our energy and resources is going to fall. That’s not good for the Australian economy.”
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