Kenneth Rogoff, a Harvard economist, forecasts turbulent economic times in the US as Donald Trump assumes office again. He highlights issues including high national debt, which he believes will lead to increased interest rates as the government competes for funding. Rogoff warns that the assumption of declining interest rates is misleading and recalls the economic struggles of the 1970s as a warning against unchecked inflation. The rising debt, which now exceeds $36 trillion, threatens to elevate costs for the federal government and disrupt economic stability.
Rogoff warned that the debt does push up interest rates, citing concerns that the government may have to pay more interest on its bonds to attract buyers.
The former IMF chief economist drew parallels to the 1970s, noting how inflation led the Fed to raise rates, which caused the dollar to lose value.
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