As a large trading power, Europe is bound to be affected…  For now, Trump is saying “I’ll threaten Europe but without specific customs barriers on European products”… Europe has a single trade policy and that means it has to react, and not just to the threat of import tariffs.
As always, the views I will be expressing are my own and are not necessarily shared by other members of the Board of Governors or the Federal Open Market Committee. Let me start with a brief review of the extraordinary performance of the U.S. economy over the past five years.