74333
The IMF policy panel has warned its 189 member  countries that there’s “no room for complacency.”
The IMF policy panel has warned its 189 member  countries that there’s “no room for complacency.”

Financial Crisis Still Haunts Policymakers

Financial Crisis Still Haunts Policymakers

Don’t celebrate too soon. That was the key message as policy makers and investors left Washington on Sunday after attending the annual meetings of the International Monetary Fund and World Bank.
For once the mood was upbeat. The IMF bumped up its forecast for global economic growth this year and next. Stocks are surging, credit spreads are tight and market volatility is low, Bloomberg reported.
Still, the fund’s policy panel warned its 189 member countries that there’s “no room for complacency.” The recovery is still a work in progress with inflation below target in most rich nations, productivity sluggish and many not feeling the benefits of stronger demand.
While in Washington, central bankers seized the opportunity to ready investors for tighter monetary policy as they predicted the improved expansion will finally ignite inflation.
Federal Reserve Chair Janet Yellen, potentially appearing at her final IMF meeting in office, said her “best guess” is prices will accelerate soon, a wager also made by European Central Bank President Mario Draghi and Bank of England Governor Mark Carney.
There was still a plea for patience as Yellen acknowledged there are reasons to worry slow inflation will persist. Bank of Japan Governor Haruhiko Kuroda said he will maintain his massive stimulus program aimed at igniting inflation and Draghi said that although there are some signs that wages are finally increasing, “we’re still not there”. ECB officials were busy discussing how to scale back stimulus without imperiling growth.
For all the discussion of higher interest rates and stronger growth, the shadows of the financial crisis and global recession still haunted participants.
Barclays Plc Chief Executive Officer Jes Staley said the benign conditions in financial markets remind him of 2006, while former treasury secretary, Lawrence Summers, said the only thing to fear is “the lack of fear itself.” Mexican central bank Governor Agustin Carstens said some emerging market assets may be priced too richly.
Surprisingly, it was the typically conservative policy makers signaling comfort. Yellen said financial stability risks in the US remain moderate, while Kuroda and Draghi also expressed confidence that market valuations aren’t stretched.
If they’re wrong they could be in trouble given ultra-low interest rates mean they lack the firepower to protect their economies if another crisis hits.
IMF Managing Director Christine Lagarde urged officials to act now to build buffers for the next downturn. In that spirit, People’s Bank of China Governor Zhou Xiaochuan said given Chinese companies had taken on too much debt “we need to pay further effort to deleveraging and strengthen policy for financial stability.”
Politics could still spoil the party. Less than five miles away from the IMF meetings, Mexican and Canadian officials were absorbing tough proposals by the US which could end up destroying the North American Free Trade Agreement.
UK Chancellor of the Exchequer Philip Hammond fought back calls from home for his resignation for being too gloomy about Brexit, while executives from JPMorgan Chase & Co. and Goldman Sachs Group Inc. warned they are preparing for the worst-case scenario. Catalonia may still try to leave Spain and Austrian nationalists are closing in on power after elections on Sunday.
What explains the ballot box revolts? The recovery spans roughly three-quarters of world output, but too many people feel they’re not being lifted by it, said Lagarde.

Short URL : https://goo.gl/xpLeVB
  1. https://goo.gl/rVAEHr
  • https://goo.gl/QVcmJD
  • https://goo.gl/qyHusU
  • https://goo.gl/aDP969
  • https://goo.gl/rxEdrR

You can also read ...

Bithumb Hacked, $32m in Cryptocurrency Stolen
Cryptocurrencies dropped after the second South Korean...
South Africa GDP Shrinks
South African gross domestic product shrank 2.2% in the first...
Washington in March imposed tariffs of 25% on steel and 10% on aluminum, in a move mainly aimed at curbing imports from China.
Russia said on Tuesday it would impose import duties on US...
Saudi Arabia, which employs about two-thirds of its citizens, is chipping away at a budget deficit that ballooned to almost 16% of GDP after the oil shock of 2014, while FDI slumped more than 80% last year.
Show up, swipe in. The routine is familiar to office workers...
Taxes in Italy Drive Economy Underground
Italy grew rapidly over the 20th century, and its black market...
Australian Telecom Co. to Axe 8,000 Jobs
Australia’s dominant telecommunications company Telstra...
European businesses say it has become harder to do  business in China over the past year.
European companies complain they still face a tough business...
South Korea to Grow 3 Percent
The Organization for Economic Cooperation and Development has...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus