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WEF 2018: Trade Policy Wild Card Could Put Growth At Risk, Says S&P Global

Equities are richly valued, but it’s not a bubble yet, says S&P’s Paul Sheard.

Paul Sheard, executive vice president and chief economist of S&P Global, speaks during the Institute of International Finance (IIF) Spring Membership Meeting in Tokyo. (Photographer: Akio Kon/Bloomberg)  
Paul Sheard, executive vice president and chief economist of S&P Global, speaks during the Institute of International Finance (IIF) Spring Membership Meeting in Tokyo. (Photographer: Akio Kon/Bloomberg)  

This year will be one of good growth with a “synchronised recovery” across global markets but U.S. trade policy could be the wild card.

That’s the word from Paul Sheard, vice-chairman of rating agency S&P Global who spoke to BloombergQuint’s Menaka Doshi on the sidelines of the World Economic Forum 2018. “The U.S. is going to be a key contributor to the global growth with the tax package,” he said but added that the global trade picture is a matter of concern.

The North American Free Trade Agreement, the United States’ bilateral trade negotiations with Canada is “running its course this year and there is some trade action towards China from the U.S. that could be the wild card as we move towards the mid-term Congressional elections,” he said.

Sheard is, however, relatively sanguine on inflation, interest rate hikes by global central banks and higher oil prices.

Valuations of asset prices around the globe maybe stretched, but they are nowhere close to bubble territory, Sheard said. “The market may be richly valued. may be valuations are at a stretch. Bubble territory is when valuations are completely out of whack...We don’t seem to be in that territory.”

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