New Delhi, May 11 -- History may rhyme, but the economic drama now unfolding in the US defies historical reason. When the US Federal Reserve's technocrats collide with an inexperienced and capricious presidential administration, conventional macroeconomic tools quickly become impotent.

In the past, when the US faced acute economic upheaval, the government devised macro-policy responses aimed at reducing uncertainty, restoring confidence, stabilizing markets and reigniting investment and consumption. This was true after the 2008 financial meltdown and the 2020 covid shock. The 2023 run on Silicon Valley Bank did not spiral into a broader crisis because of the government's swift intervention.

Also Read: China began de-risking its economy ...