Bloomberg Talks David Malpass Talks Trump Policies
Jul 16, 2025
David Malpass, former President at the World Bank, shares his insights on Trump’s economic policies and their domestic and global impacts. He critiques the Federal Reserve's role, highlighting its missteps and their effects on small businesses and median incomes. The discussion emphasizes the need for a shift in fiscal and monetary policies, advocating for dual mandates to stabilize prices and maintain lower interest rates. Malpass also proposes a new economic model focused on credit growth to improve individual income stability and support the U.S. dollar's status.
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Fed's QE Mistakes and Inflation
- The Fed's QE policy led to huge financial losses and significant inflation.
- This was partly due to merging fiscal deficits with monetary policy.
Change Fed's Inflation Model
- The inflation-targeting model is flawed and backward-looking; Fed should pursue price stability instead.
- Lower interest rates are needed given the strength of the U.S. economy and its investment appeal.
US Credit Rating Could Lower Rates
- The US's economic power should justify lower interest rates akin to a strong company's credit rating.
- Markets currently focus on inflation and growth, but this view can shift with a new Fed model.