G-20 leaders face toxic brew of political instability, trade tensions and slowing global growth
on Iran, Mexican tariffs and immigration enforcement raids, his fellow leaders hope he might be ready to do a multilateralist makeover this week in Japan and join his colleagues in common cause. Unlikely as that might sound to his critics, the emerging danger of a 2020 recession may mean that his re-election depends upon it.
Most worrying is that the US Federal Reserve – the closest thing to a global central bank due to the dollar's leading role – enters this downturn with a depleted arsenal: a benchmark policy rate of 2.25 to 2.5% compared by 5.25 % in September 2007. And Japanese and European central banks are already in negative-rate territory, so how to cut further?
"The monetary and fiscal interventions and private-sector backstops used after the 2008 financial crisis simply cannot be deployed to the same effect today,"economist Nouriel Roubini, one of the few economists to predict the US housing market crash of 2007 and 2008. "Under these conditions, a severe enough shock could usher in a global recession, even if central banks respond rapidly.
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