The blaze will take a while to get going for the simple reason that any administration — even one with a working knowledge of Washington — can only move so quickly to implement its to-do list. For the year ahead, Bloomberg Economics forecasts global growth at an unremarkable 3.1%, unchanged from 2024. Inflation is set to slow to 3.4% from 6%, with readings in the US and other advanced economies drifting back to the 2% central banks have long targeted.
Donald Trump won a second term in the White House by promising a bonfire of the verities — the truths that wonks in economic and foreign policy circles hold sacred. Free trade is out; protectionism is in. Worrying about the debt is out, tax cuts are in. The US security guarantee is out; do-it-yourself defence is in.
The established order Trump wants to overturn hasn’t covered itself in glory. Under President Joe Biden, inflation in the US soared close to 10%, partly as a result of overdone fiscal stimulus. Decades of free-trade orthodoxy have frayed the blue collars of US factory workers. Wars in Ukraine and Gaza have called into question Washington’s continued leadership in world affairs.
