European Central Bank : Trump’s victory bad for world economy

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European Central Bank : Trump’s victory bad for world economy

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European Central Bank, ECB, governing council member, Ewald Nowotny, has lamented Donald Trump’s shock election win in the United States, saying, “it is not a good day for the world economy.”
Donald Trump

Donald Trump

He told newsmen in Vienna, Italy that the ECB was “prepared to intervene,” warning of “massive insecurities” following the vote outcome that sent shockwaves through global markets.Nowotny, who is on the ECB’s governing council that decides monetary policy, added, “Close observation is certainly necessary right now.”He noted that Europe’s recovery could also be affected if Trump’s regime took a “menacing turn.”He said that he expected “a period of uncertainty in the medium term”, as had happened after Britain’s decision to leave the EU in June.The victory of the Republican candidate over his Democratic rival Hillary Clinton sent stocks tumbling in the Asian market, although markets pared losses in European trading and London’s FTSE 100 index briefly bouncing into positive territory.Nowotny, however, said it was too early to say if the US Federal Reserve was still likely to raise interest rates in next month.He said, “That will depend on how the American economy reacts in general.”Meanwhile, the ECB’s chief economist Peter Praet has called for calm following the development.Praet said in a banking conference in Brussels, “I think we have to be calm- calmer than the markets certainly.“It’s too early to react to such events and we are closely monitoring the situation.“I think all communication on monetary policy has not changed and will not change as a result.” 

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