Debt levels in the west, according to the IMF’s latest fiscal monitor, have not been higher than they are today since the second world war. The generalised upswing in the global economy is in no small part due to the world’s biggest economy sucking in imports. A global economy awash with debts denominated in US dollars looks vulnerable to a sharper-than-expected increase in American interest rates from the Federal Reserve triggered by rising inflation. Indeed, the prospect is that Mr Trump will become still more protectionist as the US current account widens over the coming months. The risks of a trade war are very real.

Source: The Guardian April 19, 2018 17:37 UTC