increased the number of economies it scrutinizes to 21 from 12 and expanded its watch list from four to nine, adding countries such as Ireland, Italy and Singapore under new tougher criteria. It again refrained from labeling China a manipulator.against goods from countries with “undervalued’’ currencies, though it said it did not intend to target independent central banks or their monetary policy decisions.
In an interview on Tuesday, however, Setser said that Trump’s ECB intervention was misplaced, largely because Draghi’s comments were aimed at domestic conditions.“Most of the world recognizes that the ECB has failed to meet its inflation target and that with a slowing European economy there is pressure on the ECB to ease policy,’’ he said. Worse, Trump’s intervention could be seen as its own form of market manipulation, Setser said, and “feeds into a building narrative in Europe that the U.S.
But the G-20 commitments are weak and “if there’s a global downturn, a global recession, countries would be very tempted to violate these terms and try to claim special circumstances,’’ he said. “There’s really no regime in place to sanction them or hit them, except the U.S. might do something.’’