The article argues that the Federal Reserve's recent rate hike decision, while justifiable on inflation grounds, highlights a critical lack of an underlying, transparent policy framework. The core problem is that the Fed's decisions appear discretionary, leading to market uncertainty because the committee's judgment, rather than clear data, dictates policy shifts. The author proposes that the Fed adopt a formal monetary policy rule—an algebraic formula linking the target rate to indicators like inflation and unemployment—to replace subjective guidance. Implementing such a rule would provide market predictability, enhance transparency, and shield the Fed from political attacks by making deviations from the standard easily quantifiable.
How to counter the Trump shock to free trade
English Summary
The Chatham House paper defines the 'Trump shock' as a fundamental shift in US policy away from rules-based international trade and global public goods cooperation, prioritizing unilateral value extraction instead. This trend is viewed as potentially permanent, challenging the established multilateral economic order. The analysis argues against forcing nations into an exclusive alignment with either the US or China. Instead, it advocates for 'middle powers' to collaboratively build a new, permanent 'third' economic pole dedicated to promoting global public goods and mutual benefit through rules-based cooperation.
中文摘要
該查塔姆館報告將「川普衝擊」定義為美國政策的根本性轉變，即從基於規則的國際貿易和全球公共財合作模式，轉向優先追求單邊價值攫取。這種趨勢被視為潛在永久性的，對既有的多邊經濟秩序構成挑戰。該分析主張不應強迫任何國家只能與美國或中國擇一結盟。相反地，報告倡導「中間力量」應協作建立一個新的、永久的「第三極」經濟支柱，專注於透過基於規則的合作來促進全球公共財和互利共贏。
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