Christine Lagarde

IMF Chief: ‘Optimistic’ About U.S. Economy While Stronger Dollar, Higher Interest Rates ‘Worrying’

Yesterday I caught the following on the website of Agence France-Presse. AFP reported:

International Monetary Fund chief Christine Lagarde on Sunday voiced optimism for US economic growth under President Donald Trump but warned it could herald trouble for the rest of the world.

“From the little we know, and I will insist on the little we know, because this is really work in progress… but from the little we hear, we have reasons to be optimistic about economic growth in the United States,” Lagarde said at the annual World Government Summit in Dubai.

Lagarde predicted tax reform and more investment in infrastructure were both likely under Trump…

“Now that’s the good news,” said Lagarde. “The more worrying news, if you will, is that it will have consequences on the rest of the world, and we are seeing it.”

She highlighted the strength of the dollar against other currencies, predicting a hike in interest rates regulated by the Federal Reserve.

“That’s a tightening that will be difficult on the global economy and for which economies will have to prepare,” said Lagarde.

(Editor’s note: Bold added for emphasis)

Hmm. Could the Federal Reserve use Lagarde’s concern regarding higher U.S. interest rates making things “difficult” for the global economy as one reason not to raise rates next month?

The other weekend, Euro Pacific Capital CEO Peter Schiff claimed in his YouTube vlog:

The reason the Fed didn’t give a clue that it might be raising rates in March, is because it has no intention of doing so.

(Editor’s note: Bold added for emphasis)

By Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. The creator/Editor of this blog is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information contained herein.)

Source:

“IMF’s Lagarde ‘optimistic’ about U.S. economy.” Agence France-Presse. 12 Feb. 2017. (https://www.yahoo.com/news/imfs-lagarde-optimistic-us-economy-104123263.html) 13 Feb. 2017.

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IMF Issues Downward Revision To Global Growth Forecast

From the International Monetary Fund website Tuesday:

Global growth continues, but at a sluggish pace that leaves the world economy more exposed to risks, says the IMF’s latest World Economic Outlook (WEO).

The WEO forecasts global growth at 3.2 percent in 2016 and 3.5 percent in 2017, a downward revision of 0.2 percent and 0.1 percent, respectively, compared with the January 2016 Update (see table).

In a recent speech, IMF Managing Director Christine Lagarde warned that the recovery remains too slow, too fragile, with the risk that persistent low growth can have damaging effects on the social and political fabric of many countries…

“The recovery remains too slow, too fragile”

Funny. That’s not what I’m hearing out of Washington and the mainstream media these days.

The IMF added:

In the United States, expected growth this year is flat at 2.4 percent, with a modest uptick in 2017. Domestic demand will be supported by improving government finances and a stronger housing market that help offset the drag on net exports coming from a strong dollar and weaker manufacturing…

You can read more about the IMF’s latest global growth forecast here on their website.

Christopher E. Hill
Survival And Prosperity (www.survivalandprosperity.com)

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IMF Sees Central Banks Boosting Gold Reserves As It Predicts Weaker Global Growth

Central banks around the world are still adding to their gold reserves. Francesca Freeman wrote on the MarketWatch website this afternoon:

The central banks of Turkey, Russia, Korea and Kazakhstan boosted their gold reserves in July, according to data from the International Monetary Fund.

According to IMF data, Turkey increased its holdings by 44.7 metric tons to 288.9 tons, Russia increased its holdings by 18.6 metric tons to 936.6 tons, Korea increased its holdings by 15.5 metric tons to 70 tons, and Kazakhstan increased its holdings by 1.4 metric tons to 103 tons.

And yesterday, the managing director of the International Monetary Fund, Christine Lagarde, discussed the international organization’s outlook for the global economy. Leslie Wroughton wrote on the Reuters website this morning:

The International Monetary Fund is set to cut its forecast for global growth next month with uncertainty over whether European policymakers will keep promises to address the euro zone crisis weighing on confidence, the head of the IMF said on Monday.

“We continue to project a gradual recovery, but global growth will likely be a bit weaker than we had anticipated even in July, and our forecast has trended downward over the last 12 months,” IMF Managing Director Christine Lagarde said.

In July, the IMF cut its global growth projection for 2013 to 3.9 percent but left its 2012 forecast at 3.5 percent.

Lagarde said the euro zone debt crisis posed the greatest risk to the world economy but that the U.S. fiscal cliff also presented a “serious threat.”

(Editor’s note: Italics added for emphasis)

Lagard also talked about countries other than the United States and from within the Eurozone. Wroughton added:

Lagarde said emerging market economies were now clearly slowing and there was “great concern” in poor countries about rising food prices and volatile commodity prices. There were also signs of growing frustrations with political transitions in the Middle East, she added.

Would that be the so-called “Arab Fall” she was talking about?

Sources:

Freeman, Francesca. “IMF: Turkey, Russia, Korea boosted gold reserves.” MarketWatch. 25 Sep. 2012. (http://www.marketwatch.com/story/imf-turkey-russia-korea-boosted-gold-reserves-2012-09-25?link=MW_latest_news). 25 Sep. 2012.

Wroughton, Leslie. “UPDATE 1-IMF chief sees shaky confidence denting global growth.” Reuters. 25 Sep. 2012. (http://in.reuters.com/article/2012/09/24/imf-lagarde-idINL1E8KOBWQ20120924). 25 Sep. 2012.

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IMF’s Lagarde: U.S. Fiscal Cliff Is ‘Risk Number One’ To Global Economy

Washington policymakers have seen Europe’s ongoing sovereign debt crisis as a welcome distraction away from America’s financial woes. But Christine Lagarde, Managing Director of the International Monetary Fund, recently pointed out the danger our economic ills pose to the global economy. From MNI (a leading provider of global foreign exchange and fixed income markets news/intelligence) last Thursday:

The looming US fiscal cliff is the number one risk globally at present, followed by the Eurozone and then the threat of another oil price surge, IMF head Christine Lagarde says.

Lagarde, speaking at the Global Investment Conference here, said the Eurozone is clearly at the epicentre of the crisis right now but is far from the only risk at present.

Risk number one … is clearly the fiscal cliff in the United States of America, where the deficit and debt to GDP ratios are actually worse than in the Eurozone,” she said.

Although the US does not face the Eurozone’s challenge of trying to secure accords with a host of states, its legislators are also struggling to take action.

“There is great uncertainty as to how Congress is going to actually deal with this fiscal cliff,” she said.

(Editor’s note: Italics added for emphasis)

According to Reuters on Sunday, Congress will try to work something out concerning this “fiscal cliff”- after the November elections. From their website on July 29:

The U.S. Congress is unlikely to resolve looming tax and spending issues before the Nov. 6 elections, a top Senate Democrat said on Sunday, but lawmakers are working on a proposal to tackle the issue after the elections.

Dick Durbin, the No. 2 Democrat in the Senate, said a bipartisan group of eight lawmakers is in talks to develop a solution to the steep tax increases and spending cuts, known as a “fiscal cliff,” that take effect at the end of the year if no action is taken.

Stay tuned…

Sources:

“IMF Lagarde: US Fiscal Cliff Key Global Risk; Oil A Worry.” MNI. 26 July 2012. (https://mninews.deutsche-boerse.com/index.php/imf-lagarde-us-fiscal-cliff-key-global-risk-oil-worry?q=content/imf-lagarde-us-fiscal-cliff-key-global-risk-oil-worry). 1 Aug. 2012.

“Durbin: US ‘fiscal cliff’ solution unlikely before election.” Reuters. 29 July 2012. (http://www.reuters.com/article/2012/07/29/usa-congress-fiscalcliff-idUSL2E8IT1AZ20120729). 1 Aug. 2012.

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