GEORGE TOWN: The possibility of President-elect Donald Trump’s administration imposing tariffs could lead to higher inflation in the United States, resulting in higher US interest rates and tighter monetary policy that could see the world’s largest economy spending less on imports, which will impact exporting nations like Malaysia, experts say.
Standard Chartered Malaysia economist and foreign-exchange analyst Jonathan Koh said US Federal Reserve (Fed) projections suggest a 50-basis-point (bp) cut in rates instead of 100 bps previously projected, as the disinflation process has stalled.
“The moderating of consumer spending power and the potential softening of the labour market are partly due to tight monetary policy in the United States,” Koh said.
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