Robert Hormats: Very Hard to Do a New Plaza Accord

The transcript discusses the potential for a new Plaza Accord, comparing current market conditions to those before the Swiss National Bank's move with the Swiss peg. It highlights the calmness of asset markets and the need for consensus when markets move adversely for all. The historical context of the original Plaza Accord is provided, noting the U.S.'s role and the fixed versus floating rate debate. The discussion concludes with the challenges of forming a new accord due to the changed global power structure, including China's significant role and the prevalence of floating rates.

What is a key condition for the formation of economic accords like the Plaza Accord?

• High FX volatility

• Low interest rates

• Markets moving unfavorably for all countries

• Calm asset markets

What was a significant action taken by the United States during the time of the Plaza Accord?

• Increasing foreign aid

• Reducing trade barriers

• Lowering interest rates

• Imposing punitive tariffs

What was a major difference between the economic conditions during the Plaza Accord and now?

• The presence of the G20

• The use of floating exchange rates

• More countries involved in trade

• Higher inflation rates

Why would forming a new economic accord be challenging today?

• The inclusion of China and floating rates

• High global inflation

• Decreased international trade

• Lack of interest from the US

Which country is now a significant part of the global economic equation, making new accords complex?

• Russia

• China

• Brazil

• India