Gavin Newsom's Warning On Trump's Economic Plan, Mohamed El-Erian's Call For Rate Cut And More: This Week In Economics
The weekend was abuzz with a flurry of news, from reports on national debt to the latest Federal Reserve stress test results. Former President Donald Trump’s economic policies were under scrutiny, while the call for a rate cut by a prominent economist added to the mix. Here’s a quick recap of the top stories.
Fed Stress Test Results
Bank of America analyst Ebrahim H. Poonawala highlighted the “inherent opacity” of the Federal Reserve stress test results. The tests revealed a wide range of impacts on minimum capital requirements, with Goldman Sachs experiencing the largest year-over-year increase in its stress capital buffer (SCB). This could potentially slow down share buybacks and negatively impact return on equity (ROE) in the latter half of 2024.
Trump’s Debt Legacy
A recent report by the non-partisan Committee for a Responsible Federal Budget (CRFB) revealed that former President Donald Trump added nearly twice as much to the national debt as President Joe Biden. Trump’s tenure saw an addition of $8.4 trillion to the national debt, while Biden has added $4.3 trillion with seven months left in his term. Trump’s debt approvals from 2017 through 2021 included $4.8 trillion in non-COVID related and $3.6 trillion in COVID relief.
Newsom’s Warning On Trump’s Economic Plan
California Governor Gavin Newsom criticized Trump’s economic policies, warning that they could cost working families up to $8,300 in higher taxes. Newsom accused Trump of making America more expensive, with measures that would impose an additional 10% tariff on everyday goods and increase labor and production costs for companies.
Nobel Laureates Warn Of Inflation Under Trump
Sixteen Nobel Prize-winning economists issued a joint warning about the potential economic risks of a second Trump term. They cautioned that Trump’s proposed policies could reignite inflation, with measures such as making his first-term tax cuts permanent and imposing universal tariffs on all imports.
El-Erian’s Call For Rate Cut
Mohamed El-Erian, chief economic adviser at Allianz, suggested that the Federal Reserve should consider a rate cut in July. However, he expressed skepticism about the likelihood of this happening, pointing to disagreements regarding inflation dynamics and a rapidly slowing economy.
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This story was generated using Benzinga Neuro and edited by Ananya Gairola
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Posted-In: Donald Trump Ebrahim H. Poonawala Gavin Newsom InflationNews Economics Markets Media
