Ambrose Evans-Pritchard: If you think it’s alarming now, just wait for Trump to wreck the bond market
It is a racing certainty that he will soon do the same to the Federal Reserve, forcing the central bank to cut interest rates into the teeth of rising inflation,
with epic consequences for the world’s dollarised financial system and for €39 trillion of offshore dollar debt contracts and swaps.
The current debate over whether or not Trump has the legal power to fire Powell entirely misunderstands the character of the Maga revolution.
America’s rule of law is for guidance only these days.
Powell will not go without a fight. “I will never, ever, ever leave this job voluntarily until my term ends under any circumstances,” he said during Trump 1.0.
US federal debt was 34pc of GDP in 1971. Today it is 122pc on the Fed measure, and galloping upwards.
The fiscal deficit is over 6pc as far as the eye can see.
The US does not have the domestic savings to fund this debt appetite. The savings rate has collapsed to 0.6pc of national income. It was 12pc in the 1960s.
Foreign investors have been plugging the gap.
The end destination is a return to US capital controls to stop foreign funds and US investors from taking their money out of America
Ambrose Evans-Pritchard 8 April 2025
Trump administration could feasibly consider imposing capital controls on money entering the country
https://englundmacro.blogspot.com/2025/03/americas-rich-scramble-to-open-swiss.html
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