The United States, China and Europe face the threat of slowdown
Following the move for the past two years, the global economy is showing signs of weakening. The United States, China and Europe face the growing threat of slowdown.
Few economists forecast a global recession over the next year. But the synchronized growth that has led most economies since 2017 seems to bend. The dangers are magnified by the US-China trade war, the struggle that divides Britain for leaving the European Union, and the continued rise in Federal Reserve rates.
All this is sufficient to contribute to the widespread decline in the stock markets. Counting the big losses on Tuesday, the US indices, which once rose to around 10% a year, lost what they gained in 2018.
The Fed is expected to raise the short-term interest rate, the key to the economy, for the fourth time this year. Increases in central bank interest rates contribute to inflation control. However, they make loans more expensive for consumers and businesses. And for dollar borrowers, Fed increases make debt payments more difficult. Argentina, for example, has fallen into recession because the cost of its debt payments has increased.
"We can not continue to grow too fast without the risk of inflation," said Adrian Cooper, Oxford Economics CEO, for the US economy. "Ultimately, this is the goal the Fed has when interest rates fluctuate continuously, it's doing so in a way that does not make a big slowdown."
Larry Kudlow, senior official of President Donald Trump, has rejected concerns that they blasted markets on Tuesday.
"The recession is so far away that I do not see it," Kudlow told reporters outside the White House. "You have faith, it's a fairly strong economy."
The collective development of the major economies of the world over the last two years has been welcomed by a weak recovery from the 2008 financial crisis. However, few economists have considered growth to be sustainable – or even desirable – in the long run.
What worries that a protracted global expansion can cause inflation or speculative investment that will inevitably slow down vulnerable economies.
These are some risks facing the global economy:
=> Federal Reserve Shares.
=> The UK's exit from the European Union.
=> Less dynamic in international demand.
The recession They believe that the global economy is currently facing the recession.
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