'He wants everything, and it's hard to get everything:' The trilemma at the heart of Trump's economic plans will define 2019
- President Trump faces a "trilemma" in achieving his economic aims in the White House, Dutch bank ING says.
- Trump's three main economic aims - a strong domestic economy, a weaker US dollar, and continued low borrowing costs - are fundamentally incompatible.
- "Donald Trump - he wants everything, and it's hard to get everything," strategist Chris Turner said.
President Trump faces a unique "trilemma" in achieving his economic aims in the White House, according to analysis from strategists at Dutch lender ING.
Speaking at a briefing for journalists in London on Wednesday, ING's global head of strategy Chris Turner argued that Trump's three main economic aims - a strong domestic economy, a weaker US dollar, and continued low borrowing costs - are fundamentally incompatible, and that at least one must fall by the wayside.
"Donald Trump - he wants everything, and it's hard to get everything," Turner said.
What Trump wants is "confidence in the long-run US economy, confidence in the stock market - he loves the stock market and talking about fresh daily highs in the market."
"He also wants a weaker dollar, that's pretty clear," Turner added.
"We have a G20 meeting coming up in Argentina on March 19. I wouldn't be surprised if they pay lip service to a stronger dollar at that meeting, but as we saw last year, the US administration is really focusing on fair trade, and it's pretty clear behind the scenes and in public that the US wants a weak dollar to support trade."
Achieving both these aims in tandem is a tricky balance to hit, Turner noted.
"The problem will be that something has got to take the strain."
"We think it will probably be the bond market that takes the strain in the next couple of years or so," he said, pointing to the chart below, featured in a presentation he delivered during the briefing:
"For the US dollar to appreciate and re-couple with rising bond yields we need a catalyst to restore confidence over the long-run state of the US economy," the slide adds.