The head of the International Monetary Fund said on Sunday that US President Donald Trump taking office is likely good for the American economy in the short term, though rising interest rates and a strengthening dollar will challenge global trade.
Christine Lagarde said Trumpâ€™s plans for additional investment in US infrastructure and his likely tax reforms will boost Americaâ€™s economic fortunes. However, Lagarde acknowledged that Trumpâ€™s policies likely will squeeze international markets.
â€œThatâ€™s a tightening that is going to be difficult on the global economy and for which economies have to prepare,â€ Lagarde said during an event. Asked how the world missed Trumpâ€™s rise and the United Kingdomâ€™s vote to leave the European Union, Lagarde described a creeping, â€œinsidiousâ€ push toward anti-globalization and protectionist thought.
â€œWe have been saying globalization is great, international trade is great â€” and it is,â€ she said. â€œBut we have not looked at those who were badly, negatively impacted.â€ She blamed those negative impacts in part on the rise of robots taking jobs, as well as the shrinking gains of the global middle class.
Lagarde cautiously sidestepped questions on her thoughts about Trump being in the White House by saying â€œthis is really a work in progress â€” thereâ€™s been of announcements, a lot of tweets, a lot of things being said.â€ Still, she stressed the importance of data and facts in making decisions.