(Jan 22): President Donald Trump faces a host of headwinds that could thwart his ability to generate a boom for the US economy, according to Harvard University professor Ken Rogoff.

Speaking in an interview at the World Economic Forum in Davos, the former chief economist of the International Monetary Fund said the policies promised this time around are less likely to help growth compared to his first term in the White House.

“Every campaign promise practically is something counter productive — I mean you can go to the tariffs, social security being not taxed, and on and on and on,” Rogoff told Lisa Abramovicz and Jonathan Ferro on Bloomberg Television. “It’s less obvious that he has the same room to run with his policies. And when he came interest rates were zero. Now they’re not.”

Rogoff’s relatively downbeat predictions on the outlook under the new president contrast both with the optimism on show from company executives in Davos, and from his own more positive assessment against consensus when Trump first took office in 2017.

“If we’re just looking at policies, the things that he did in the first term I think on the whole were constructive for the economy — deregulation, the tax cuts, getting rid of the state and local deduction,” the economist said. “He has a lot of constraints that he didn’t face the first time."

Interviewed just minutes later, Rogoff’s predecessor at the IMF, Raghuram Rajan, cautioned that the US economy has “things gnawing at the edge.” He cited a pickup in credit-card delinquencies and the end to the student debt moratorium.

“There are things to be a little concerned about,” the former Reserve Bank of India governor said, while cautioning that US central bank officials are also struggling to cool growth.

“In general the Fed is not getting the economy to slow to the extent it wants,” he said. 

For his part, Rogoff reckons the next move by the Federal Reserve is in the balance.

“My guess is, where we are at the moment, the odds of a hike are as good as the odds of a cut,” he said.

Uploaded by Siow Chen Ming