The world's eyes are turning towards the strongest economy in the world the USA economy, whose Gross Domestic Product (GDP) is estimated at approximately 27 trillion dollars, as catastrophic recession indicators have become an inevitable reality for this economy in particular and for the global economy in general, the matter has been made worse by the US Federal Reserve, headed by Jerome Powell, fixing interest rates last time, instead of reducing it, because this reduction will help revive the US economy, as job creation indicators were unexpectedly low, and unemployment rose above the 4% barrier for the last month.
اضافة اعلان
All of this is due to the Fed’s strict and late implementation policies ,the Fed failed previously two years ago when inflation rose by not immediately intervening in raising interest at that time, and today its decision is still too late,to reduce interest rates to save the US economy from the recession that actually began due to its indicators. The balances that were not carefully studied and being drawn into the goal of reducing inflation to 2% were the reason for this, and in reality it is far from being achieved to reach it at least by the end of the year 2025, which must be changed to become its barrier between 2.5% and 3%,and I wrote an article about this a year ago in Al-Rai newspaper under the title, “Targeting an inflation rate of 2% will exhaust the global economy.”
The most important reasons for the failure to reach an inflation rate of 2% in the US Federal Reserve’s policies was the coincidence of the US Federal Reserve’s policies with the Russian-Ukrainian war, which greatly harmed the American economy in particular and the global economy in general. What further complicated the matter was the Gaza War, and the subsequent rises due to these two wars in the prices of energy, food, other goods, and logistical transportation , and the lack of proper flow of raw materials between countries as a result of disputes between them, and the closure of parts of global trade routes and the diversion of other routes, all that were followed by the current US government’s weak performance in the economic file, and the record of US debt, which exceeded 35 trillion dollar.
Last week, the stock markets and cryptocurrency markets suffered a strong blow, as they lost nearly $700 billion in one day. This will cast doubt on all investments, stocks,bond markets, digital and encrypted currencies soon, and will affect the demand for oil. What awaits Jerome Powell in his first upcoming meeting is the decreae on the interest, which is expected to be between 25-50 points. It must be followed by other reduction measures before the end of this year to save the US economy in particular and the global economy in general from economic recession.
Strategic and Economic expert and analyst
Engineer Mohannad Abbas Haddadin
[email protected]
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