Macro Hive Conversations With Bilal Hafeez Ep. 253: Barry Eichengreen on Trump Trade Policy, Dollar Status and Debt Crises
16 snips
Jan 31, 2025 
Barry Eichengreen, a UC Berkeley economics and political science professor and former IMF advisor, dives into pressing macroeconomic issues. He discusses the current inflation regime and the crucial independence of central banks under political pressure. The conversation shifts to Trump's trade policy, including tariffs and their historical context, alongside the U.S.-China tech rivalry and its security implications. Eichengreen also explores the dollar's status as a reserve currency and the impacts of U.S. debt on economic stability.
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Volatile Inflation Environment
- Central banks face a volatile inflation environment, potentially overshooting or undershooting targets.
- They must be adaptable, reacting quickly to inflationary shocks while maintaining independence and 2% targets.
Central Bank Independence
- The European Central Bank (ECB) is considered highly independent due to its multinational structure.
- The Federal Reserve's independence is susceptible to pressure from the White House, especially regarding interest rate adjustments.
Trump's Influence on the Fed
- Trump's influence on the Fed is most likely through appointing a loyal chair.
- This is easier than changing statutes, which would require congressional and court approval.
