What’s the Connection Between Inflation and Geopolitical Risk: Some Insights in Targeting and a Complication for the Trump Tariff Plans

Given that the core inflation rate in the US reached a 10-month high in January – which might pose a problem for the Trump tariff plans – it’s worth noting the inflation targeting experiences of emerging markets as a monetary policy framework to effect changes in the currency composition of their external liabilities.

In this very cool study from 2016 – which uses our ICRG data – it was found that inflation targeting contributed to a 10 percentage points lower USD share in international debt in targeting countries compared to non-targeting countries. (https://lnkd.in/gmPnf9S8)

With a stronger greenback in the future, the findings could prove instructive to central banking authorities.

Our data drives.

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