Here's Why
Here's Why 'Mar-a-Lago Accord' Chatter Has Everyone's Attention
Feb 28, 2025
Enda Curran, Bloomberg's Global Economics Correspondent, dives into the buzz around the 'Mar-a-Lago Accord,' a bold notion aimed at weakening the US dollar to boost American exporters. He discusses the potential ripple effects on global trade and compares it to historical strategies like the 1985 Plaza Accord. Curran also explores innovative solutions for US Treasury bonds, including the idea of issuing century-long zero coupon bonds. The conversation delves into how these radical ideas could reshape the financial landscape and influence inflation.
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Quick takeaways
- The proposed Mar-a-Lago Accord aims to weaken the U.S. dollar to enhance the competitiveness of American exports in global markets.
- Implementing such a strategy involves significant risks, including potential inflation and adverse effects on consumers and foreign investment.
Deep dives
The Concept of the Mar-a Accord
The Mar-a Accord represents a potential strategy proposed by President Trump to redefine the U.S. trade relationship with the global market by deliberately weakening the U.S. dollar. This approach aims to enhance the competitiveness of American exporters by making U.S. goods cheaper for international buyers. Analysts speculate that such a strategy may culminate in a grand agreement with key trading partners, promoting domestic consumption of local goods rather than exporting them to the U.S. The idea hinges on balancing the trade deficit, which reached a staggering $1.2 trillion in 2024, by addressing the dollar's overvaluation.
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