May 17, 2022

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Potential continued growth in the US by FinanciaLounge

© Reuters. AllianzGI: The potential for continued growth in the US

Allianz (ETR: Global Investors) weekly report from chief economist Greg Mayer highlights the resilience of US consumption: The Fed can be able to fight inflation without reducing employment

Central banks have a difficult task fight inflation without hampering the economy to the point of causing a recession. The effects of monetary policy are seen with a delay of months and in the meantime political pressures could become urgent. In its weekly forecast for the chief economist Greg Meyer from Allianz Global Investors He states that the economy’s “hard” landings are more frequent than “soft” landings in stages when central banks are tightening them up and compares their task to the challenge of returning a rocket to Earth from space and having it land gently perpendicular to a platform in the middle of the ocean. Possible, but far from easy.

External forces at play

The question today is not whether the Eurozone will be able to avoid a recession, but whether the probability will depend on geopolitical developments rather than the interventions of EU countries. European Central Bank There are also questions about the ability of feed it. The US central bank wants to slow inflation sharply, to its highest level in forty years, without a noticeable rise in unemployment, which is now approaching its lowest level in 50 years. It will be difficult even in the most favorable period. But the Fed also has to deal with external forces, including the implications for growth and economic inflation For China’s zero-covid policy and the invasion of Ukraine…

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** This article was written by Finance