The problem with the war’s impact on global growth is that prospects for a post-pandemic recovery are “slowing down”, However, “the biggest concern” is the social tensions that risk “creating a more difficult climate for the authorities to make the right decisions”. This was stated by the Director General of the IMF, Kristalina Georgieva, in a discussion on the sidelines of the Washington meetings. The prospect of slowing growth and high inflation, coupled with a strengthening dollar threatening to trigger capital flight from emerging markets, is “a problem that is not going away and is getting worse.” This was stated by the Director General of the IMF, Kristalina Georgieva, stating: “Vulnerable countries need the rest of the world to provide the necessary assistance, if we do not do this there will be a shock that they will not be able to will endure”.
Risks to global growth are also highlighted by ECB President Christine Lagarde. “Our monetary policy will depend on incoming data and our evolving views on the outlook. In the current conditions of high uncertainty, we will maintain optionality, graduation and flexibility in the conduct of monetary policy.” In a note to the 45th IMF meeting, ECB President Christine Lagarde said: “We will take all necessary measures to fulfill the ECB’s mandate to seek price stability and help safeguard financial stability,” Lagarde said. There’s no point in committing to a day or a timeline, we’ll wait until we have the data.” This is how ECB President Christine Lagarde answers the question of whether Frankfurt will hike rates as early as July IMF debate, has stated that inflation, although much more widespread in the euro area and much higher than the 2% target, is in any case “supply inflation and needs to be tackled gradually”: with the new macroeconomic data at the June meeting ” we will determine when in the third quarter net purchases will exit and if and when a rate hike will be required.
Meanwhile, a 50 basis point US interest rate hike is “on the table” at the Federal Reserve meeting in May. The President of Fed Jay Powell during a debate at International Monetary Fund meetings in Washington. The Fed “had an expectation that inflation would fall around this time and that expectation was disappointed, so actually we want to see progress now.” Fed Chair Jay Powell said so, adding that “we intend to move faster to neutral interest rate levels”.
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