World breathes sigh of relief as Trump spares Fed, IMF

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WASHINGTON: Global policy makers gathered in Washington this week breathed a collective breath that for the past 80 years, the economic order of US centrality that had not yet been falling despite Donald Trump’s internal view.

Trade talks were dominated by the International Monetary Fund and the World Bank’s spring meetings, which also brought some de -co -scattery statements about its relations with China from Washington.

But after Trump’s attacks on international organizations and the Federal Reserve, some deep questions arose about the central bankers and finance ministers: Can we still trust the US dollar as the world’s safe haven and two lenders who support the international economic system after the end of World War II?

A conversation with dozens of policy makers around the world revealed general relief on Trump’s dollar’s international status chair, Jerome Powell, who had previously described it as “big losing”.

And many people also saw a silver lining in the US Treasury Secretary Secretary Scott Basant, demanding a new shape of the IMF and the World Bank, as it shows that the United States is not going to exit the two lenders who helped Burton Woods Conference in 1944.

“This week was one of the cautious relief,” said Robert Holzman, the governor of the Central Bank of Austria. “There was a turn (in the US administration’s stand) but I am worried that this may not be the last. I maintain my reservations.”

Fed politics and to some extent, hollow from the IMF and the World Bank is very much to know for most officials.

The last resort lender will be lacking, about $ 25 trillion bonds and loans issued abroad will be questioned.

No substitute

At the center of policy makers’ concerns, the world’s financial hedimon is not a ready alternative to the United States. This is a situation that economists know as Kundelberger Trap after the famous historian Charles Kundelberger.

To ensure, the euro, which is a remote reserve currency, is gaining popularity in the light of a new location found as an island of EU’s relative stability.

But policy makers talking to Reuters believed that the European single currency was not yet ready to defuse the dollar and could expect a slight increase in the world’s reserves by 20 %.

In Germany alone alone, credit ratings in 20 countries participating in Germany and the size of the size investors demand a safe haven.

Some other members are extremely debtors and political and financial problems-recently in France last year-which raises lasting questions about the long-term blocking of the block.

And the Eurozone’s geographical proximity to Russia – especially the three Baltic countries that were once part of the Soviet Union – even more blatant shadows. In Japan, now a lot of small and China’s heavy currency is worse than that, it has no alternative to the dollar system put on Fed and Breton Woods by two companies.

In fact, the IMF and the World Bank can hardly survive if their biggest shareholder is drawn by the United States, officials said.

“The United States is quite important for multilateral institutions,” Polish Finance Minister Anderzage Domenic told Reuters. “We’re glad they are left.” Nevertheless, many people can be expected to return to old status and thorny matters, such as large -scale dependence on US firms for many important services from credit cards to satellite.

But some observers argued that the uproar in the market for the past few weeks, in which American bonds, shares and currency are sold rapidly, may have shot in the arm because it forced the tech change by the administration.

“When President Trump talked about the dismissal of Jay Powell, the fact that the markets reacted so loudly that it termed the administration as the reality of just one discipline that if you cross the line, it would be very severe,” said City’s global economist Nathan Sheets.