US Inflation may accelerate due to Donald Trump’s trade policy — BIS

The Bank for International Settlements (BIS) has warned about a potential intensification of inflation in the United States. According to the organization's experts, these changes are being driven by the negative impact of Donald Trump's trade policies on the global economy.

In a recent report, BIS General Manager Agustín Carstens, also noted the adverse effect of the US president's decisions on current market conditions. Moreover, he emphasized that current challenges are putting pressure on the Federal Reserve System (Fed), particularly on its chairman Jerome Powell. Currently, the official is opposing the White House's initiatives to lower interest rates.

Among additional risks to the global economy, BIS experts also highlighted the unprecedented public debt levels of several countries. In OECD member states, government debt servicing costs have reached 4% of GDP and will continue to rise.

Furthermore, the threat could come from another source: volatile or sustained price growth will lead to higher government bond yields. In the concluding section of the report, the organization noted investors' reaction to current economic developments. As BIS experts point out, consumers have become more sensitive to price changes.