Despite signs of a global economic slowdown, Federal Reserve Vice Chairman Richard Clarida threw his support behind the U.S. economy, saying it has room to grow. A decade following a punishing financial crisis, Clarida said “the current economic expansion almost certainly will become the longest on record.”
The Fed vice chair’s comments come amid the IMF cutting its global growth forecast to the lowest level since the financial crisis, citing the impact of tariffs and a weak outlook for most developed markets. According to the IMF, the world economy will grow at a 3.3 percent pace, which is 0.2 percent lower versus the initial forecast in January.
Furthermore, the global volume of trade in goods and services will increase 3.4 percent in 2019, which represents a drop from the 3.8 percent gain last year. The IMF, however, did mention that recent policy implementations like the U.S. Federal Reserve keeping interest rates steady are positive signs moving forward.
Are the Fed’s forecasts in line with the rest of the market?
Jan Hatzius, chief economist at Goldman Sachs, examines the decline in the Federal Reserve’s forecast outperformance relative to consensus. He speaks on “Bloomberg Daybreak: Americas.”
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