Here’s Ben Bernanke’s take on Trump and the US economy

SINGAPORE (Jan 18): On Friday, incoming US president Donald Trump will inherit an economy that is in its eighth year of expansion.

Unemployment has halved in that time, to 4.6% from 10% during the 2008 financial crisis, while wages were rising at 2.9% in Dec. As a result, inflation is nearing the Federal’s Reserve’s 2% target, prompting the central bank to raise its interest rate by 25 bps on Dec 13. That’s led to a strengthening of the greenback versus other major currencies such as the euro, yen and yuan.

Confidence in US corporations has also risen, with the S&P500 still testing new highs. The market is now expecting Trump to launch an attractive fiscal plan which includes large-scale domestic infrastructure spending and job creation, bringing down individual and corporate taxes and tax breaks to companies repatriating overseas earnings.

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