As everyone knows, October has been a terrible month for equity markets. Some market participants feel that this did not just coincide with higher interest rates, but was caused by flawed Fed monetary policy and comments on overshooting. Like the humming chorus in Madama Butterfly, there has been a steady rise in the number of voices supporting a Fed pause in December. These include members of the Federal Reserve Open Market Committee itself, such as Neel Kashkari, and leading economists such as Jason Furman. 

President Xi JinPing of China recently celebrated the fifth anniversary of the Belt & Road Initiative (BRI), the centerpiece of China’s global projection of economic, political and financial power.  However, the BRI project is meeting significant obstacles and seems in urgent need of a reboot.  Significantly, the main sources of criticism and reevaluation come from some of the major beneficiaries of the project.

I returned to Europe this week to hear views from the other side of the pond, as US trade policy continues not just to pivot, but to spin.  There is no doubt that a major reset of key trading relationships is now underway with implications for currencies worldwide.  As the US economy seems to be outpacing growth everywhere except in China and India, will US monetary policy have unintended global spillover effects, especially for emerging markets? And more direct effects from trade policy in developed nations? European PMI figures announced today are down to 2-year lows. 

I am sharing my just published article, making the case for US policymakers to use "democratic governance" as an orienting strategic concept for engagement with Latin America.

The article first appeared on the website of Newsmax.

China says the United States has waged a trade war, while America’s intelligence agency is now terming it as a China-led cold war. Nevertheless, the trade brouhaha continues. Trumponomics ceases to be rhetoric anymore, and Xinomics is candidly reciprocal. In fact, neither countries were striving for autarky, nor is the situation as grim as it was in the 1930s. Yet the present scenario is destined to reach alarming proportions, as its spillover effect has begun to deter the global value chains (GVCs) that perennially define the geo-economic architecture of international business today.

Mexico matters. In addition to being our southern neighbor, Mexico is our third largest trading partner, after China and Canada. It is ranked as the 15th largest economy in the world. On Sunday the country experienced a seismic change in leadership. Fueled by anger at violence and corruption, Andrés Manuel López Obrador, the 64-year old populist center left candidate best known as AMLO, was elected by a clear majority in all but one state and a simple majority in both houses. He had promised to Make Mexico Great Again.