Dublin: A leading Irish economist has warned that Ireland could be plunged into a deep recession if US President Donald Trump succeeds in forcing major cuts to American interest rates.
Dr. Alan Ahern said Trump’s push to pressure US Federal Reserve Chair Jerome Powell into rapidly slashing rates could trigger a global financial shock.
Ahern warned that an aggressive monetary shift could lead to outcomes worse than the 2008 crash.
“As we saw in 2008, stock markets would collapse, credit markets would seize up, and borrowing and lending would stall,” he said.
“If panic spreads to the bond markets, the US will fall into a deep recession — and it will take the global economy with it. Ireland will not escape and could face the mother of all recessions.”
The confrontation between Trump and Powell has intensified as the Fed chair prepares to step down in May. Trump has openly criticised Powell, claiming he is “not a fan”, while Powell has publicly cautioned that political interference threatens the Fed’s independence. Central banks internationally have voiced support for Powell.
Economist David McWilliams also weighed in, arguing that Trump’s plan is to artificially depress the value of money ahead of the US midterm elections.
“Trump wants cheap interest rates, more printed dollars and the illusion that Americans feel wealthier than they are,” McWilliams said.
“He sees it as a way to win over middle-class voters — but it risks economic damage far beyond the US.”
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