Stanley Fischer, the No. 2 official at the Federal Reserve, expressed concern Tuesday about the possibility that the Trump administration could pursue protectionist policies that challenge the model of global economic integration.
“I’d be concerned if that basic model is overturned,” the Fed vice chairman said in an interview on CNBC.
Fischer noted that the Trump administration has not implemented any of the campaign promises about trade that concerned him but suggested that it could turn to such actions after pursuing tax reform.
The economic integration that took place following World War II has, on balance, worked well, Fischer said.
“The way to grow was to integrate into the global economy and that worked spectacularly for China. It worked for us,” he said.
Fischer, who has served on the Fed’s Board of Governors since 2014, himself represents economic integration between countries, having previously served as the governor of the Bank of Israel.
He said Tuesday that the Fed does take possible actions by President Trump into account when formulating its monetary policies, but explained that it is difficult to incorporate possible legislation into forecasts.
“You’re not going to put a huge weight on something you don’t really know is going to happen,” he said.
Fischer expects the Fed to raise its interest rate target twice more this year, in line with the bulk of the Fed’s monetary policy committee.
