US Exceptionalism, European Crisis - What are the Policy Responses?
Tweeddale Advisors
Wed 27 Nov 2024 - 14:00 GMT / 09:00 EST
Summary
Mark discussed the widening divergence between sustained US economic exceptionalism and a deepening European crisis, setting out how a second Trump presidency could drive meaningful shifts in energy policy, trade, tariffs, taxation, border control and defence spending, while examining Europe’s persistent growth stagnation, high energy costs, weakening competitiveness, political instability in core countries such as Germany and France, fiscal and debt constraints across the region, and the growing risk of deindustrialisation, and assessing how these structural and policy dynamics could interact to shape inflation trends, interest rate paths, currency movements, sovereign bond markets and broader global investor positioning across the G7 over the coming years.
Topics
• The Return of Trump – how will a vastly more experienced and better staffed President Trump approach key issues for markets – tariffs, energy, defence, etc.
• The “Boiling Frog” Economic Crisis in Europe – the third winter of the largest war in Europe since 1945 is unlikely to see growth improve. Will political paralysis worsen or will Trump’s election be the jolt the EU needs to start listening to Draghi? Can Covid style joint EU bonds be agreed upon to fix defence supply chains?
• UK government – New Faces, Same Problems. Can the UK avoid another bond market crisis as the deficit keeps soaring and the economy stagnates.
• US Exceptionalism – this has been the story of this cycle since 2021 - does the US Dollar keep rising by default as most other regions struggle?”
