USAID Director Mark Green, a top international policy official at the Treasury Department, said the US Treasury, Fed and other US agencies will work through policy consequences in next year’s budget.
“As far as I’m concerned, the only prudent response to this is to take a step back and work through that in the context of the budget, which is how we should be thinking about it,” Green said in an interview Thursday with reporters.
Asked whether a faster rate of bond-buying by the Fed as well as data-dependent monetary policies by the European Central Bank and Bank of Japan will prolong an effort to stimulate global growth, Green said: “I think the US and global economy have room to grow together.
“I think the larger truth, though, is there’s a value in doing those things together and in the end, the Fed is going to weigh that against what it says about the federal funds rate target.”
US Treasury Secretary Steven Mnuchin told lawmakers last week that any bond-buying plan that the Fed starts in the first half of 2018 would be “data dependent.”
“I’m not going to telegraph any of our upcoming actions. But you know, we’re going to grapple with what are the impacts,” he said during a hearing of the Senate Banking Committee.
After a long period of extraordinary economic policy, the US Treasury in April hired Green, a former Goldman Sachs executive, as director of its US Foreign Economic Policy Affairs Office, known as FEPA. The office’s current head, Brett McDowell, is departing at the end of the year.
Green oversaw economic diplomacy on one of the most controversial issues confronting the administration: the North American Free Trade Agreement. As the head of US diplomatic efforts to renegotiate the pact, he worked to address the painful impact on manufacturing and agriculture from higher trade barriers in North America.
While there has been initial progress on a deal, there are still differences on issues such as digital trade and investment, especially as the US and Canada seek to define Chapter 19. A report released earlier this week by US Trade Representative Robert Lighthizer’s office said the US must pursue a deal that “defines NAFTA’s prohibition on domestic content requirements as not requiring a majority of inputs from the region” for the agreement to remain competitive.
“I think we will need to recognise that a growing economy works for all workers, not just an elite group who are extremely skilled,” Green said.
Also in his interview, Green said he is not at all concerned about a political rift between the Treasury and the White House on trade and NAFTA.
“I think it’s one of those elements that is important, if you’re going to have a negotiating process, and I’m assuming there’s a lot of confidence in the leadership,” he said.
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