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Global Trade Faces Major Contraction
- WTO revised its global trade forecast to a 0.2% contraction due to aggressive US tariffs introduced by Donald Trump.
- Trade uncertainty and fragmentation risk global GDP losses up to 7% by 2040 if current trends continue.
Uncertainty's Hidden Trade Impact
- Trade policy uncertainty makes forecasting global trade akin to predicting weather in a cyclone.
- One-sixth of trade decline is due to uncertainty alone, not tariffs, highlighting the damage of unpredictability.
Fed's Inflation-Growth Dilemma
- Jerome Powell warns tariffs could cause longer-lasting inflation and slower growth due to disrupted supply chains.
- US faces dilemma as interest rates can only target inflation or support employment, not both simultaneously.