Mission: Impossible? Chancellor headed to the IMF with a very large challenge – and he was not alone | Money news

There will be many things to chew at the International Monetary Spring (IMF) meeting this week.

Central bankers and the Minister of Finance will go down to Washington for their latest two -year meetings, a place where politicians and academics meet, all try to understand what is happening in the global economy.

Everything and nothing has changed since the last time they met in October – one person continued to dominate the agenda.

Six months ago, the delegates wondered what Donald Trump Can win the election and what does it mean for taxes and tariffs: how far he will encourage it? Will the policy match the rhetoric?

This time, expecting iteration of the same question: Will the US President be at risk of entering the largest economy in the world into a recession?

Yes, he displays a bombastic appearance on what is called “liberation day”, but is he now going back? Is the market effectively examined?

Behind the scenes, finance ministers from all over the world will practice the power of their persuasion, each of them jostling for meetings with their US colleagues to negotiate Trump reduction tariff.

That includes Chancellor Rachel Reeves, who still extended hopes for trade agreements with the US – even though she was not alone in that regard.

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Are we heading to the recession?

The IMF economist has decided on Trump’s potential damage.

Last week, they warned about increasing risk of financial stability after the turbulence period in the financial market, which was caused by Trump’s decision to increase US protectionism to the highest level in a century.

In the middle of this week the organization will publish the economic view of its world, where it will reduce global growth but stop predicting full recession.

The others are less optimistic.

Kristalina Georgieva, Director of Implementing IMF, said last week: “Our new growth projections will include a prominent price reduction, but not a recession. We will also see markup on inflation estimates for several countries.”

He acknowledged that the world was undergoing a “rebooting a global trading system,” Comparing trade tensions with “bubbling pots for a long time and now boiling”.

He continued: “Most, what we see is the result of erosion of beliefs in the international system, and trust between countries.”

Don’t poke the bear

That is a response that is calibrated carefully. Georgieva does not blame the US door and stop asking Trump administration to stop or water it Aggressive tariff policy.

That might be an option. For the frustration of past and present politicians, the IMF usually does not avoid making its opinions known.

Last year he warned Jeremy Hunt against tax cuts, and in 2022 openly criticizing the Liz Truss government’s plan, warning tax cuts would trigger inflation and inequality.

Taking an honest approach with Trump invites risk. His government has consumed whether to withdraw from global institutions, including the IMF and World Bank.

The US is the largest shareholder in both, and its departure can destroy two organizations that have become the pillars of the world economic order since the end of the second world war.

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Here, in England, Andrew Bailey has caused concerns about the prospects of global fragmentation.

“It is” very important that we do not have world economic fragmentation, “said the Governor of Bank England.

“Most of that is that we have support and involvement in multilateral institutions, institutions such as the IMF, the World Bank, which supports world economic operations. That is very important.”

Trump’s government might take a different view when its review of the inter -government organization was completed.

That is the main tension that runs through this year’s spring meeting.

How many IMFs will be said and how much we have to read that is implied, it still needs to be seen.