James C. Capretta | RealClearPolicy
India's central bank governor Urjit Patel has urged the Fed to make a course correction to prevent a further diversion of significant amounts of available global capital away from emerging market economies. James Capretta argues that Patel may have a point, noting that India's rupee has fallen more than 6 percent relative to the dollar since October last year. Additionally, the currencies of Argentina, Brazil, and Turkey have each fallen by more than 20 percent relative to the dollar over the past six months. However, the Trump administration seems unaware and unconcerned about the risks its fiscal policy might create for the global economy. Consequently, Capretta believes the pleas coming in from around the world are not likely to have much effect in Washington.
Ignore emerging market economics at your peril
Desmond Lachman | InsideSources
According to the International Monetary Fund, the emerging market economies now account for over half of the world economy. At the same time, their governments and their corporations are hugely indebted to the global financial system as they have never been before. Desmond Lachman argues that the administration and the Federal Reserve are ignoring, at their peril, the adverse effect of monetary, fiscal, and trade policies on the emerging market economies, including Argentina, Brazil, South Africa, and Turkey. Should those economies falter because of US policies, given their combined size, they could materially affect both the US and the world’s economic and financial systems. However, in light of the latest America First trade measures and of Chairman Jerome Powell’s recent pronouncements that the emerging market economies are not a factor in the Fed’s monetary policy decisions, Lachman fears it is unlikely the emerging market economies will get any relief from US economic policy decisions.