Global Economics

IMF Warns the United States and China about Massive Deficits April 19, 2024--Even though consumer prices are coming down, high interest rates due to U.S. and China's deficits pose significant costs to other countries and carry a risk to global financial stability, the International Monetary Fund warned this week. "Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar. It pushes up funding costs in the rest of the world, thereby exacerbating existing fragilities and risks," said Vitor Gaspar, IMF director of fiscal affairs. Rising Debt Poses Costs By the end of the decade, global debt is likely to reach 99 percent of global GDP. The rising debt levels are increasing "volatility in the United States, raising risks elsewhere thr...

Housing Costs Squeeze Buyers August 17, 2023--Even as mortgage rates in the United States hover at a 22-year high, the housing sector continues to defy logic by rising in price. In fact, increasing costs of shelter in the United States were "by far the largest contributor" to the inflation rate, according to the latest CPI report. The cost of housing rose by an annualized rate of 7.7 percent last month. Meanwhile, the overall inflation rate stood at 3.2 percent. The unusual resilience to rate increases by the Federal Reserve has led Goldman Sachs to revise its prediction for the sector from a drop of 2.2 percent to a rise of 1.8 percent, several news outlets including Axios reported. An 'Aberration' of Trends The investment firm described the unusual occurrence as "unsustainab...

Gas And Food Prices Continue To Climb; Jobs Market Still Tight Despite Layoffs February 17, 2023—The U.S. economy continues to run more hot than cold, despite previous forecasts that a recession would loom early in 2023. The IMF had projected a steep decline for the global economy at the beginning of the year. Then, the World Bank said the world was "perilously close" to falling into a recession. But despite the doom and gloom, the U.S. economy keeps growing. Prices are climbing; the job market remains tight even as certain economic sectors deliver layoffs; and U.S. equity markets are rising. Inflation: Prices Still Rising Inflation in the United States remains high, even as the overall CPI figure comes down from its peaks of 8.6 percent and 9.1 percent of an annualized...