A Conversation on the US Economy

A Conversation on the U.S. Economy

Location: HQ1 Atrium, HQ1-1-700

President Trump has called for a recalibration of economic policies in the United States to raise growth and income. In this one-on-one conversation, IMF Managing Director Christine Lagarde speaks with U.S. Treasury Secretary Steven Mnuchin about the administration's new policy vision, exploring both domestic and global ramifications.

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Panelists

Christine Lagarde, Managing Director, IMF

Christine Lagarde has been Managing Director of the International Monetary Fund since July 2011. She held various ministerial positions within the French government, including Finance and Economy Minister (2007–11), Minister for Foreign Trade, and Minister for Agriculture and Fisheries. She was also Chairman of the Global Exchange Committee and Global Strategic Committee of Baker & McKenzie.

Steven Terner Mnuchin, Secretary, U.S. Treasury

Steven Terner Mnuchin was sworn in as the 77th Secretary of the Treasury on February 13, 2017.

As Secretary of the Treasury, Mr. Mnuchin is responsible for the executive branch agency whose mission is to maintain a strong economy, foster economic growth, and create job opportunities by promoting the conditions that enable prosperity and stability at home and abroad. He is also responsible for strengthening national security by combating economic threats and protecting the integrity of our financial system as well as managing the U.S. Government's finances.

Prior to his confirmation, Secretary Mnuchin was Finance Chairman for Donald J. Trump for President. In this role he spent the last year traveling with the President. He met with hundreds of business leaders. He also served as a Senior Economic Advisor to the President in crafting his economic positions and economic speeches.

Prior to his confirmation he also served as Founder, Chairman, and Chief Executive Officer of Dune Capital Management. He also founded OneWest Bank Group LLC and served as its Chairman and Chief Executive Officer until its sale to CIT Group Inc. was the first bank merger over 50 Billion dollars post financial crisis.

Earlier in his career, Secretary Mnuchin worked at The Goldman Sachs Group, Inc. where he was a Partner and served as Chief Information Officer. He has extensive experience in global financial markets and oversaw trading in US government securities, mortgages, money markets, and municipal bonds.Secretary Mnuchin is committed to philanthropic activities and previously served as a Member of the Boards of the Museum of Contemporary Art Los Angeles (MOCA), the Whitney Museum of Art, the Hirshhorn Museum and Sculpture Garden on the Mall, the UCLA Health System Board, the New York Presbyterian Hospital Board, and the Los Angeles Police Foundation. He was born and raised in New York City. Secretary Mnuchin holds a Bachelor's Degree from Yale University.

A Conversation on the U.S. Economy

Contributor: Veronika Sola, Secretary’s Department

IMF Managing Director Christine Lagarde and U.S. Treasury Secretary Steven Mnuchin met in a one-on-one conversation on the U.S. administration's new policy vision to raise U.S. growth and income, exploring both domestic and global ramifications.

Key Points:

Regulatory and Tax Reforms

- Mnuchin noted that implementation of extensive reforms of the tax system and of the regulatory environment are at the forefront of the US administration work agenda. He saw the very uncompetitive tax code and often contradictory regulations as major obstacles to doing business in the US. Removing them will be instrumental in reaching the growth target of 3 per cent or more. While these reforms might have a short-term cost, they are expected to pay for themselves in the long term and benefit Americans at a large range of income levels.

International Trade

- On international trade the administration’s agenda is to make sure the United States have free and fair trade. Rather than protectionism, they believe in reciprocity in both, trade and investment. The goal is for US companies to have the same opportunities abroad as the foreign ones have in the United States. Mnuchin agreed with Lagarde that the standard tools such as improving education or supporting SMEs, will still play an important role in promoting trade.

AML/CFT and Cybersecurity

- With a big financial infrastructure between the Treasury and the IRS, cybersecurity is a very important internal issue and one of Mnuchin’s personal priorities. He is working to address in cooperation with the relevant internal agencies as well as through increased coordination with international counterparts. Finding and stopping terrorist financing is another major policy priority at the Treasury.

International Spillovers from US Policies

- In reaction to the question on whether the US administration considers the impact of its policies on the rest of the world, Mnuchin noted that he believes that policies that spur growth in the United States will also boost growth elsewhere.

Role of the IMF

- On what the IMF is doing right and where it could improve, Mnuchin noted that the IMF has successfully evolved from its traditional mandate, while not going too far from it. However, he was of the view that, it is not only important how multilateral institutions change over time, but also how they execute on their priorities. Lagarde noted that the execution is not always in the hands of the institution.

Quotes:

“The US economy is well positioned for growth…The US administration believes it can grow by 3 per cent or more sustainably.” Steven Mnuchin, U.S. Treasury Secretary

“Sustained US economic growth is good for global growth.” Steven Mnuchin, U.S. Treasury Secretary

“The advancement of technology at all fronts will continue to create economic growth, and that’s very important.” Steven Mnuchin, U.S. Treasury Secretary

“Sometimes execution is in the hands of governments and it can be frustrating for IMF staff, when their policy recommendations are not implemented.” Christine Lagarde, Managing Director, International Monetary Fund