Capital Link International chief strategist Uwe Parpart. Photo: CNBC screen grab

The United States faces little risk of inflation currently, according to Uwe Parpart, chief strategist at Capital Link International in Hong Kong.

Parpart said: “There was a whole slew of reasons why, not just in the United States, but in Europe as well, and also in the developing sector, there is no inflation to be found at this point of time.”

If the Trump administration’s tax package was passed by Congress and implemented “what we’re going to see is essentially demand-side stimulus”, he predicted.

“I think that this is not a supply-side reform, as it’s made out to be. This is very much unlike that the Reagan tax cuts were all about. The Reagan tax cuts came off very high interest-rate cuts under [Fed chief] Paul Volcker. We moved into a lower interest-rate regime and there was the ability for massive structural reforms actually taking place in the labor market and elsewhere. None of this is at all possible at this time, and that’s why I think the bond market in particular is not doing anything.”

Parpart is also Editor of Asia Times.