<!-- Swiftype Variables -->


U.S.-China trade war could negatively affect markets, push interest rates lower — official

Financial markets are likely to contract because of the ongoing trade war between the U.S. and China, causing interest rates to fall, warned Nathan Sheets, former Treasury Department undersecretary for international affairs at the Pension and Lifetime Savings Association's annual conference in Edinburgh.

Speaking Wednesday, Mr. Sheets said U.S. President Donald Trump is "constrained by markets and politics." As Mr. Trump negotiates a trade relationship with China, Mr. Sheets said, "he doesn't want to sacrifice markets and the global economy in the process."

U.K. pension funds and delegates attending the PLSA conference were split over the outcome of the ongoing U.S.-China trade war, with 34% of the panel's audience expecting a deal in May or later, while 35% foresee no outcome but continued negotiations between Mr. Trump and China's President Xi Jinping.

Mr. Sheets said the trade war threatens to move investors to place a rising "risk off" weight on emerging markets currencies and create upward pressure on the dollar and the yen.