The International Monetary Fund (IMF), which in April penciled-in growth of 2.8% for the US economy in 2014, said that it now expects the figure to be only 2% and the Federal Reserve may have scope to keep interest rates at zero for longer than investors expect.
The Washington-based IMF announced that “momentum faded in the US economy” early this year as a severe and prolonged winter “conspired with other factors” such as a drawdown in inventories, a sluggish housing market and slower demand.
While a rebound is underway from the resulting contraction in the first quarter, it is providing “only a partial offset” to the weakness experienced in Q1.
The IMF added that it still expects US growth to accelerate in 2015 to 3%, but doesn’t expect a return to full employment until the end of 2017, amid low inflation.
However, further ahead it anticipates longer-run potential growth averaging only around 2% for several years, below historical averages. A year ago, the IMF was projecting potential growth rates of 2.3% for 2015-16 and 2.4% in 2017-18.
For the Federal Reserve, the downwards revisions mean that “policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets.”
The IMF also backed president Obama’s efforts to raise the US minimum wage level to US$10.10 per hour from the current level of US$7.25. In April, US Senate Republicans blocked the legislation.
The report urged the implementation of more proactive labour market policies, which included strengthening the Earned Income Tax Credit (EITC) in addition to a higher minimum wage.
“This would help raise incomes for millions of working poor and would have strong complementarities with the suggested improvements in the EITC,” it stated.
In today’s digitally connected world, infinite quantities of data are produced by consumers daily at a mind-boggling pace and volume. With under three months left to prepare, here are four areas for businesses to consider, to make sure they are ready for GDPR implementation.
Cash-flow based metrics now feature prominently alongside traditional revenue measures of business performance in the key figures or financial summary pages of any public company.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.