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Economists at the country's largest lender, SBI, today said they see India's Q2 real GDP growth slowing down further to 6.5% in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and whether it is slowing down, the analysts said they expect FY25 growth to come "closer to" 7%. SBI analysts join a long line of agencies like Fitch, ADB, IMF, Moody, World Bank, S&amp;P, and even RBI in forecasting India's GDP growth for FY25 in the range of 6.8% to 7.2% for FY25, driven by robust consumption and investment. SIP inflows have been at an all-time high, and so has QIP (qualified institutional placement) fundraising. As many as 71 companies raised Rs 88,678 crore this year through QIPs. Activity in Indian primary markets also remained robust, with 78 mainboard IPOs in 2024; this is a 111% rise from just 38 listings in FY23. Between April and June 2024, India's real GDP grew by 6.7%, the lowest growth seen in 15 quarters, pushing experts to believe that India is caught in a cycle of slowdown. "There is some incipient pressure evident on the domestic economy. Based on our analysis of 50 meaningful leading indicators (both consumption and demand-centric), a dip looks plausible across select cohorts of agriculture, industry, and services in Q2," the <keyword id="22337294" type="General" weightage="20" keywordseo="SBI-economists" source="keywords">SBI economists</keyword> added. Stating that they track 50 indicators to gauge economic activity, SBIs note said the proportion of indicators showing acceleration declined to 69% in Q2 FY25, as against 80% in Q2 FY24 and 78% in Q1 FY25. However, things might be changing now, given that rural demand has started looking up amidst muted urban demand. SBI also explained that the ongoing regulatory tightening on unsecured lending and roadblocks that are hindering rollover/refinancing of debt through unsecured credit are dismantling the unwarranted exuberance that had built up post-pandemic, especially in the urban areas. Madhu Lunawat, CIO &amp; Fund Manager, Bharat Value Fund states that the overall investment environment remains strong due to favorable economic conditions supporting government policies &amp; reforms. "The sustainable inflow from domestic investors is going to support the Indian equity market in any kind of correction. The long-term bullish structure of Indian economy will continue to attract new domestic &amp; global investors to participate in India’s growth story through various Investment avenues.” <h2>Rate cuts not on cards</h2>RBI Governor Shaktikanta Das clarified today that changing the monetary policy stance to 'neutral' does not mean a rate cut is imminent in the central bank's next policy announcement. Notably, RBI MPC is set to meet between December 4 and 6, 2024, to decide if the prevailing repo rate of 6.5%, which has stayed unchanged for the last 2 years, should be brought down or not. In its last meeting, The <keyword id="20501100" type="General" weightage="20" keywordseo="RBI-monetary-policy" source="keywords">RBI monetary policy</keyword> committee had shifted its stance to 'neutral' indicating that it is open to adjusting interest rates based on economic conditions. "It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn't mean that the next step is a rate cut in the very next meeting. It's not so," Das said. Das also cautioned that inflation remains a key factor, and inflation and CPI prints for October are expected to stay high.

SBI economists see Q2 GDP growth slowing down to 6.5%; FY25 growth to be closer to 7%

<ul class="summary-list"><li>Runaway US debt levels at risks to global stability, the International Monetary Fund said in a report.</li><li>Spiking Treasury yields are associated with exchange rate turbulence and higher interest rates elsewhere.</li></ul>Ballooning US debt will weigh on more than just Washington, as spiraling borrowing costs have the potential to distort the global economy, according to the International Monetary Fund.In its latest Fiscal Monitor report, the fund expects US deficit to more than triple overspending levels in other advanced economies by 2025, projected to hit 7.1%."Loose fiscal policy in the United States exerts upward pressure on global interest rates and the dollar," Vitor Gaspar, director of the IMF's fiscal affairs department, said in a related <a href="https://www.imf.org/en/Publications/FM/Issues/2024/04/17/fiscal-monitor-april-2024" target="_blank" rel="noopener">press </a><a href="https://www.imf.org/en/Publications/FM/Issues/2024/04/17/fiscal-monitor-april-2024">briefing</a><a href="https://www.imf.org/en/Publications/FM/Issues/2024/04/17/fiscal-monitor-april-2024" target="_blank" rel="noopener"></a>. "It pushes up funding costs in the rest of the world, thereby exacerbating existing fragilities and risks."Specifically, the report made reference to the impact that debt has on Treasury yields, as the government must increasingly offer higher returns in order to keep attracting buyers. But such large and sudden rate increases are often associated with exchange rate turbulence across global markets, while a 1 percentage point spike in US interest can lead to a ramp up in foreign long-term nominal rates.Markets have already gotten a taste of debt-related yield jumps, after a US credit downgrade sent <a href="https://markets.businessinsider.com/news/bonds/treasury-bond-yields-market-selloff-market-crashes-dot-com-bubble-2023-10">10- and 30-year rates surging above 5% in October</a>. The IMF didn't just raise flags on the US, but warned that China's deficit and debt levels were concerning: "How these two economies manage their fiscal policies could therefore have profound effects on the global economy and pose significant risks," the report warned. For its part, Washington has undergone "remarkably large fiscal slippages," the IMF said, referencing falling taxes and a doubling in government spending between 2022 and 2023, despite strong growth.If this trend continues, the Congressional Budget Office expects <a href="https://www.pgpf.org/blog/2024/03/the-national-debt-is-rising-unsustainably-and-other-takeaways-from-cbos-latest-projections" target="_blank" rel="noopener">US debt to reach 116% of GDP by 2054</a>, where it currently equaled 97% in 2023. Some analysts have called this <a href="https://markets.businessinsider.com/news/bonds/us-debt-crisis-gdp-ratio-unsustainable-default-treasury-bond-crash-2023-10">unsustainable</a>, and a path towards national default.Others have touted that <a href="https://markets.businessinsider.com/news/bonds/us-debt-interest-payments-federal-budget-deficit-social-security-medicare-2023-9?utm_medium=ingest&amp;utm_source=markets">solutions are straightforward</a>, as long as political backing can be secured. That includes a bipartisan willingness to cut spending, as well as tax hikes across income levels.

The US's blowout debt burden is one piece of a global problem, IMF warns

<ul class="summary-list"><li>Global government borrowing is set to hit $100 trillion this year, the International Monetary Fund said.</li><li>It pointed to political uncertainty, aversion to tax hikes, and spending pressures as key drivers.</li></ul>Global public debt is on track to surpass $100 trillion this year for the first time — and the increase threatens a wider financial crisis, the International Monetary Fund warned.In a <a target="_blank" class="" href="https://www.imf.org/en/Publications/FM/Issues/2024/10/23/fiscal-monitor-october-2024">report</a> published Tuesday, IMF researchers said total government borrowing was set to reach 93% of worldwide GDP this year and could hit 100% by 2030, with the US and China driving the increase.Mushrooming public debts "<a target="_blank" class="" href="https://www.businessinsider.com/us-debt-34-trillion-deficit-government-spending-economy-recession-jpmorgan-2024-1">raise the probability</a> of debt distress or broader financial crisis," the authors noted, adding that the <a target="_blank" class="" href="https://www.businessinsider.com/us-national-debt-government-spending-stock-market-financial-crisis-economy-2024-3">interest payments</a> eat into government budgets, reduce spending flexibility and hinder their ability to respond to economic downturns.The IMF also warned of a "severely adverse scenario," in which global debt could balloon to 115% of global GDP by 2026 because of "weaker growth, tighter financing conditions, fiscal slippages, and greater economic and policy uncertainty.""Countries are increasingly vulnerable to global factors affecting their borrowing costs, including spillovers from greater policy uncertainty in systematically important countries, such as the United States," the authors wrote in a blog accompanying the report.The report's authors projected that around two-thirds of countries would stabilize or reduce their debts in the coming years, but added there were "<a target="_blank" class="" href="https://www.businessinsider.com/us-debt-outlook-56-trillion-cbo-government-budget-deficit-gdp-2024-6">good reasons</a>" future debt could be higher than projected.Those include a broader political embrace of increased government spending, stiffer resistance from lawmakers to higher taxes, and pressure to spend on priorities such as the clean-energy transition, aging populations, and national security.America's national debt has <a target="_blank" class="" href="https://www.businessinsider.com/us-debt-problem-explained-deficit-gdp-inflation-economy-interest-rates-2024-4">more than tripled</a> in under 25 years, ballooning from $10.3 trillion in 2000 to a record $35.7 trillion, according to the US Treasury website.It has grown by more than $7 trillion since 2019, reflecting the US government's <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-powell-government-spending-national-debt-fiscal-deficit-interest-2024-2">aggressive spending</a> during the COVID-19 pandemic and more recent outlays such as <a target="_blank" class="" href="https://www.businessinsider.com/us-spent-over-22-billion-arming-israel-battling-houthis-2024-10">military support for Israel</a> and Ukraine, which together have cost it <a target="_blank" class="" href="https://www.businessinsider.com/how-america-spent-over-100-billion-defending-ukraine-2024-8">well over $100 billion</a>.The debt looks set to grow further with both presidential candidates, <a target="_blank" class="" href="https://www.businessinsider.com/what-you-need-to-know-about-kamala-harris-opportunity-economy-2024-9">Kamala Harris</a> and <a target="_blank" class="" href="https://www.businessinsider.com/trump-tax-plan-tarriffs-benefits-top-earners-study-2024-10">Donald Trump</a>, pledging to spend big if they enter the White House. Harris <a target="_blank" class="" href="https://www.businessinsider.com/kamala-harris-economy-proposal-25k-first-time-homebuyers-down-payent-2024-8">proposed</a> offering down-payment assistance for first-time homebuyers, and expanding the child tax credit and capping childcare costs to help young parents. Trump has <a target="_blank" class="" href="https://www.businessinsider.com/tax-tips-overtime-trump-proposals-income-money-election-2024-10">suggested eliminating</a> taxes on tips, overtime pay, and Social Security while also extending many of the tax cuts he made as president in 2017.

Global government borrowing is set to top $100 trillion — and shows no signs of slowing down

<ul class="summary-list"><li>The International Monetary Fund aimed criticism at growing risks in the US economy.</li><li>In a report last week, it called out high debt, banking vulnerabilities, and trade barriers.</li></ul>The US was the target of pointed criticism from the International Monetary Fund last week, with the organization calling out everything from Washington's trade policy to its deficits.In its annual evaluation, the IMF touted a "remarkable performance" in the world's largest economy and expects further growth to come. However, some issues are becoming too pressing to ignore, it said."The fiscal deficit is too large, creating a sustained upward trajectory for the public debt-GDP ratio," the summary said. "The ongoing expansion of trade restrictions and insufficient progress in addressing the vulnerabilities highlighted by the 2023 bank failures both pose important downside risks."Chronic deficits are leading toward a debt-to-GDP ratio of 140% by 2032, IMF said, a situation that needs to be addressed urgently. By the US' own estimates, the national debt will balloon to $56.9 trillion by 2034, a steep increase from earlier projections.In an era of higher interest rates, alarms have <a target="_blank" href="https://www.businessinsider.com/us-economy-outlook-prediction-national-debt-risk-spending-milken-conference-2024-5">started ringing over fiscal stability</a> as Washington will need to finance its debts at elevated borrowing costs. Some of Wall Street's heaviest hitters have <a target="_blank" href="https://www.businessinsider.com/jamie-dimon-jpmorgan-inflation-consumer-spending-interest-rates-government-debt-2024-5#:~:text=Dimon%20rang%20the%20alarm%20on,similar%20concerns%20in%20recent%20weeks.">issued warnings of eventual fallout</a>.To counter this, the IMF pushed for policymakers to find efficiencies in discretionary spending and to raise indirect and income taxes — including on those earning under $400,000 a year.What's more, partisan debt ceiling standoffs need to end, it said. The worst instance occurred 2023, when Republicans and Democrats brought the <a target="_blank" href="https://www.businessinsider.com/janet-yellen-debt-ceiling-government-run-out-money-june-1-2023-5">US close to default</a> over funding disagreements."These create systemic risks to the U.S. and global economy that are entirely avoidable. Institutional changes should be designed to ensure that, once appropriations are approved, the corresponding space is automatically added to the debt ceiling," the report said.But threats to financial stability don't end there. Domestically, "concrete actions have been lacking" when it comes to strengthening US banking safety, especially in light of 2023's brief crisis sparked by the failure of Silicon Valley Bank.The US needs to pursue tougher bank supervision, and lower the pool of uninsured deposits, the IMF said.While the fund also suggested a need for the US to implement the Basel III regulatory agreement to do this, the proposal has been widely unpopular in the industry.The legislation would apply larger liquidity requirements on big dealers, which <a target="_blank" href="https://www.businessinsider.com/banks-consumer-groups-basel-iii-finance-regulation-capital-requirements-liquidity-2024-1">banks have argued as a cut back to their ability to invest.</a>Meanwhile, Washington's increasingly protectionist approach to trade is a risk to US and global growth, the IMF said.The criticism comes soon after President Biden issued new tariffs on specific advanced manufacturing products from China in an effort to boost the US green energy industry.But the practice goes further back, when former President Trump set off a trade war with Beijing. If the Republican candidate wins the White House again, he has promised to apply universal tariffs on all imports, which economists have warned would be <a target="_blank" href="https://www.businessinsider.com/trump-tariff-plan-inflation-policy-impact-trade-war-china-rates-2024-5">massively inflationary.</a>"The U.S. should unwind obstacles to free trade and seek instead to bolster competitiveness through investments in worker training, apprenticeships, and infrastructure," the IMF wrote.

The IMF slams the US with urgent warnings over its debt, deficits, and trade barriers

<ul><li>The Indian economy is expected to grow at over 7% rate in upcoming years</li><li>Fiscal deficit down to 6.4% of <keyword id="19904293" type="General" weightage="20" keywordseo="GDP" source="keywords">GDP</keyword> in FY24</li><li>Current Account Deficit (CAD) down to 0.7% of GDP </li></ul>With the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024 to be presented tomorrow, Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="Nirmala-Sitharaman" source="keywords">Nirmala Sitharaman</keyword> is presenting the <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> in the parliament today. Think of the <keyword id="6354872" type="General" weightage="20" keywordseo="economic-survey" source="Orion">Economic Survey</keyword> as a report card of the country's economic performance over the past year, along with inputs and outlook for the coming fiscal year. Here are some crucial highlights from the Economic Survey 2023-24: <h2>Macro-economic indicators</h2>Per the World Economic Outlook in April, the <keyword id="19948494" type="General" weightage="20" keywordseo="global-economic-growth" source="keywords">global economic growth</keyword> was pegged at 3.2% in 2023. In contrast, <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s real GDP grew by 8.2% in FY24, staying above the 8% mark for 3 out of 4 quarters in FY24. Gross Fixed Capital Formation, or investments in long-term, value-generating fixed assets increased by 9% real terms in 2023-24. The government trimmed down fiscal deficit trimmed down from 6.4% of GDP in FY23 to 5.6% of GDP in FY24.The current account deficit, which indicates that the country is a net importer rather than being an exporter, came down to 0.7% of GDP in FY24, as opposed to 2% of GDP in FY23. While retail inflation averaged at 6.7% in FY23, it dropped down to 5.4% in FY24 During FY24, primary markets saw capital formation, or facilitated raising funds worth Rs 10.9 lakh crore, which makes up for around 29% of the gross fixed capital formation. India's market capitalization to GDP ratio is the fifth largest in the world. <h2>Inflationary Trends </h2>Core inflation eased down to 9-year lows, while core goods inflation came down to a 4-year low. However, food inflation continued to stay high, inching up to 7.5% in FY24, as opposed to 6.6% in FY23. This was largely because of adverse weather conditions, which caused a spike in onion and tomato prices and impacted kharif crop production. Going ahead, RBI's short-term outlook remains positive. Assuming a normal monsoon and no extraordinary policy or geopolitical shocks, the inflation is estimated to drop to 4.5% in FY25, and further down to 4.1% in FY26. These are in line with IMF's inflation forecasts, which stand at 4.6% for 2024 and 4.2% for 2025. <h2>Export-Import trends</h2>India's service exports jumped by 4.9% to $341.1 billion in FY24, driven mainly by IT and software services. Apart from being the top remittance recipient globally, with remittances worth $120 billion in 2023, the country also witnessed investment inflows from foreign investors. As of March 2024, India's forex reserves were sufficient to cover over 10 months of projected imports in FY25, and about 98% of all its external debt. The country's external debt to GDP ratio has been largely consistent over the years, standing at 18.7% of the GDP as of March 2024. <h2>Key growth areas to look out for in FY25 </h2>Essential to adopt bottom-up reform approach, with special short to medium term emphasis on structural changes, job and skill creation, addressing challenges faced by MSMEs, managing India's transition towards a green, clean economy, deepening the country's nascent bond market and laying greater stress on tackling quality of health, especially amongst young Indians. Deliberate focus needed on boosting private investment, expanding India's MSMEs, tapping into the potential of India's agriculture sector, manage India's green transition, urgently bridge the employment-education gap and build capacity of states to sustain and complement India's growth. In the medium term, the country's economy is expected to grow at a rate of over 7%.

Economic Survey 2024: GDP grew by 8.2%, to sustain 7%+ growth momentum, fiscal deficit down to 6.4% of GDP

<ul class="summary-list"><li>A decade of low growth and high debt is coming, IMF chief Kristalina Georgieva said in a Thursday speech.</li><li>"Inflation is not fully defeated. Fiscal buffers have been depleted. And debt is up," she said.</li></ul>The world could soon sink into an era of depressed growth and spiraling debt, IMF managing director Kristalina Georgieva said in a <a href="https://www.imf.org/en/News/Articles/2024/04/sp041124-outlook-global-economy-policy-priorities-kristalina-georgieva" target="_blank" rel="noopener">speech</a> delivered at an Atlantic Council event."Without a course correction, we are indeed heading for 'the Tepid Twenties' — a sluggish and disappointing decade," she said Thursday. "Inflation is not fully defeated. Fiscal buffers have been depleted. And debt is up, posing a major challenge to public finances in many countries," she outlined. The IMF now expects medium-term global growth to reach just above 3% — well below historical averages, Georgieva said. That's on account of stalling productivity across economies that's chipped into growth potential:Although the US' post-pandemic economy has largely been a story of success, its rebound stands in stark contrast to a wide-spread slowdown, with low-income countries taking on most of this burden."The sobering reality is global economic activity is weak by historical standards. Prospects for growth have been slowing since the global financial crisis," she said.To counteract this, Georgieva called for policies that will decisively slash inflation and debt, allowing governments to pursue productivity-boosting policies, such as those that ramp up the geen and digital transition.While central banks are generally making headway with price stability, global debt has churned so high that some countries are at risk of falling into distress, Georgieva cautioned. Though higher debt is not a new trend, the return of high interest rates has made debt servicing a challenge across the world."In advanced economies, excluding the US, interest payments on public debt will average about 5 percent of government revenues this year," she said. "But the cost of servicing debt is most painful in low-income countries. Their interest payments are set to average about 14 percent of government revenue—roughly double the level from 15 years ago."As some countries are already facing debt distress, Georgieva called for improved restructuring programs. For all countries, she advocated for fiscal prudence, recommending a closure of tax loopholes, and improved public spending. This may be crucial, as the IMF forecasts deficits to remain too high to stabilize debt one-third of advanced and emerging economies.

Welcome to the 'tepid twenties,' a decade of sluggish growth and rising debt, IMF chief says

<ul class="summary-list"><li>Donald Trump has touted plans to raise trade barriers and replace income tax with tariffs.</li><li>That's prompted a wave of criticism, with many economists warning of inflation and trade wars.</li></ul>With the <a target="_blank" href="https://www.predictit.org/markets/detail/7456/Who-will-win-the-2024-US-presidential-election">odds</a> of a Donald Trump White House at <a target="_blank" href="https://markets.businessinsider.com/news/bonds/trump-election-odds-treasury-bond-yields-inflation-deficit-debt-economy-2024-7">a new high</a>, economists and market forecasters have been wrapping their heads around what the new regime will look like.As with most things Trump-related, there's a serious divide between outlooks, and his fiscal platform is no different. Experts hold drastically different views, creating a new hot-button topic that will continue to be debated up until the election in November.Trump's proposed fiscal path contains multiple elements, the first being tariffs. In a bid to tilt trade in favor of the US, Trump has made wide-sweeping duties a cornerstone of his international platform. Virtually all US imports would be <a target="_blank" href="https://www.businessinsider.com/trump-tariff-plan-inflation-policy-impact-trade-war-china-rates-2024-5">taxed at 10%</a>, he's said, though this rate would be as high as 60% for key competitors, such as China. It's a much more aggressive approach than Biden's actions so far, which have included a 100% tariff on Chinese electric vehicles.Trump has also floated the idea of using tariffs in place of the US income tax. The plan was well received by the <a target="_blank" href="https://www.businessinsider.com/donald-trump-tariffs-trade-war-inflation-income-tax-cuts-debt-2024-6">House Republicans who first heard it</a>.But in certain economic circles, many have disagreed with these policies while warnings of price hikes and global trade wars.<h2 id="5d1c30a8-1a73-4c8c-95cc-e22c24ba2488">The camp staunchly opposed to Trump's policies</h2>The base argument against Trump's fiscal platform is that tariffs are, by nature, inflationary. According to the nonpartisan <a target="_blank" href="https://taxfoundation.org/research/all/federal/trump-tariffs-biden-tariffs/">Tax Foundation</a>, when imported goods get levied, their producers either lift prices or pull the product out. That lowers supply, boosting costs on domestic goods as well.JPMorgan's chief global strategist David Kelly has called the proposals an "<a target="_blank" href="https://www.businessinsider.com/stagflation-recession-trump-policy-tariff-immigration-deportation-economy-outlook-jpmorgan-2024-7">elixir for stagflation</a>." That description was outdone by former Treasury Secretary Larry Summers, who characterized the income-tax-replacement idea as the "<a target="_blank" href="https://www.businessinsider.com/trump-tariff-income-tax-proposal-stagflation-yellen-summers-trade-war-2024-6">mother of all stagflations</a>."Further, Nobel-winning economist Paul Krugman recently made the argument in a <a target="_blank" class="" href="https://www.nytimes.com/2024/07/02/opinion/tariffs-trump-china-taxes.html">New York Times op-ed</a> that Trump's proposed tariffs would benefit only the wealthiest Americans. He also predicted that 80% of US consumers would end up losing after-tax income.In numerical terms, Goldman Sachs estimated that the policies would cause US GDP to drop 0.5%, while pushing inflation up 1.1 percentage point. The firm says that's enough to force a <a target="_blank" href="https://www.businessinsider.com/trump-tariff-trade-policy-barrier-income-tax-rate-hikes-krugman-2024-7#:~:text=Trump%27s%20wide%2Dreaching%20tariff%20plan,%25%2C%20Nobel%2Dwinning%20economist%20says&amp;text=Trump%27s%20proposed%20tariffs%20would%20benefit,%2Dtax%20income%2C%20he%20said">130-basis-point increase</a> in interest rates, at a time when most investors want borrowing costs to climb down.The Peterson Institute offers a more drastic outcome: a full-fledged global trade war. The nonpartisan think tank notes that the last time blanket tariffs were implemented nearly a century ago, it <a target="_blank" href="https://www.businessinsider.com/trump-tariff-trade-war-risk-china-exports-great-depression-economy-2024-5">contributed to the Great Depression</a>.But not everyone shares this degree of skepticism.<h2 id="8c18cb08-2648-4da1-af4b-98e9f0a497cf">The camp that says it won't be as bad as feared</h2>Longtime market veteran Ed Yardeni, the president and chief investment strategist at Yardeni Research, falls into this group.In a recent <a target="_blank" href="https://www.ft.com/content/73a7a056-1941-4e90-8d28-435d9de9cc71">op-ed for the Financial Times</a>, he cited the "benign" impact Trump's first-term tariffs had on the US economy. He noted that real GDP rose to a record 8.5% between the fourth quarter of 2016 to the fourth quarter of 2019, leading up to the pandemic. Further, inflation stayed at about 2% that whole time.Looking ahead to a new term, Yardeni thinks Trump's most extreme pursuits will likely be watered down by Congress. He also says Republicans' pro-business support for oil and gas production will keep a lid on consumer prices and counteract inflationary pressure.Famed "Big Short" investor Steve Eisman was more bluntly skeptical of inflation impact in a <a target="_blank" class="" href="https://www.youtube.com/watch?v=EMABPTMmF3U">recent CNBC interview</a>:"Do I think that Donald Trump will increase tariffs on China? Sure. Do I think that would have a massively inflationary impact on the US? I think that's ridiculous."Republican donor Kyle Bass — who serves as the chief investment officer of Hayman Capital Management — has taken a different tact in his support of Trump's fiscal agenda. He thinks Trump is intentionally over-exaggerating his plan, and what he would actually enact would be more restrained."Hyperbole is useful to kick the hornet's nest," he told <a target="_blank" href="https://www.youtube.com/watch?v=d0dgI5AxhzY">CNBC</a> last month.<h2 id="058337c1-4aba-4ec1-9982-ed5e410d4845">It ultimately depends on Congress</h2>The Nobel prize-winning economist Joseph Stiglitz represents a sort of middle ground between the two polarized factions. Although he was one of 16 economists to sign an open letter warning that Trump's policies could drive inflation higher, he also says — similar to Yardeni — that <a target="_blank" class="" href="https://www.businessinsider.com/trump-presidency-policies-inflation-economy-americans-joseph-stiglitz-letter-2024-6">a lot depends on Congress</a>."I think general consensus, not just my view, but almost anybody modeling what is going on would say the Trump administration would be more inflationary," he told Business Insider. "How much more depends on how radical they are. And that depends on where Congress is."The chart below from Oxford Economics shows these unique dynamics in action. Although the a "full-blown Trump" administration would be the most inflationary outcome during the next presidential term, the data shows that a Trump win under a divided government would be less inflationary than a "baseline Biden" regime.<div type="image" title="Chart comparing inflation in different election scenarios" height="1406" width="1716" msid="111715410" hostid="261" sizebytes="56546"></div>

Trump's trade and tax policies are the new hot-button topic dividing economists and market experts

Price pressures seem entrenched in many economies, including <keyword id="6359891" type="General" weightage="20" keywordseo="emerging-markets" source="Orion">emerging markets</keyword>, and upside <keyword id="22195" type="General" weightage="20" keywordseo="inflation" source="Orion">inflation</keyword> risks are sizeable, said <keyword id="154034" type="General" weightage="20" keywordseo="Gita-Gopinath" source="Orion">Gita Gopinath</keyword>, First Deputy Managing Director at <keyword id="6366068" type="General" weightage="20" keywordseo="international-monetary-fund" source="Orion">International Monetary Fund</keyword> (IMF), adding that central banks must keep their monetary policies tight. Gopinath was addressing the Annual Conference of the Central Bank of Brazil in Brasilia on Wednesday (local time). "...markets are probably too optimistic about what it will take to bring down inflation in EMs. Despite encouraging signs, I am worried that price pressures seem entrenched in many economies and that upside inflation risks are sizeable," she said at the conference. Hence, she said central banks must remain resolute in keeping policies tight and recognize that insufficient monetary tightening now may necessitate even more painful actions down the road - a lesson from the high inflation period of the 1970s that very much applies today. "Fiscal restraint can help support the fight against inflation by central banks. And financial tools--judiciously used--can improve trade-offs in the event of pronounced financial stress." She stressed on the fact that challenges are global, but are more heightened for emerging markets. Hence, it is critical for emerging market authorities to refine and strengthen their monetary, fiscal, and financial policy frameworks. However, there is a silver lining for the emerging markets as they have thus far proven resilient to their own policy tightening and tightening by advanced economies, where rates have risen at the sharpest pace in several decades. The US central bank's current policy rate, which is now in a target range of 5.0-5.25, is the highest in several years, and notably, it was near zero in the early part of 2022. Raising <keyword id="6371181" type="General" weightage="20" keywordseo="interest-rates" source="Orion">interest rates</keyword> typically helps in cooling demand in the economy and thus helps in managing inflation. Growth in emerging markets remained strong through last year and is expected to hold up reasonably well this year, while capital outflows have been limited, Gopinath added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/sbi-q4-2022-23-results-indias-largest-lender-posts-highest-ever-quarterly-net-profit-of-16695-crore/articleshow/100327874.cms">SBI Q4 results: India’s largest lender posts record quarterly net profit of ₹16,695 crore, up 83% YoY</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/ethnic-apparel-brand-manyavars-stock-under-pressure-as-promoter-to-offload-stake/slidelist/100324527.cms">Ethnic apparel brand Manyavar’s stock under pressure as promoter to offload stake</a>

Upside risks for inflation sizable, central banks must stay resolute: IMF's Gita Gopinath

<ul class="summary-list"><li>The <keyword id="12030574" type="UNKNOWN" weightage="60" keywordseo="imf" source="Orion">IMF</keyword> is predicting more pain for global stocks as central banks around the world tighten their monetary policies.</li><li>"Risk assets such as equities could sell off further," an IMF official told CNBC. </li><li>The <keyword id="11894209" type="UNKNOWN" weightage="60" keywordseo="fed" source="Orion">Fed</keyword> on Wednesday indicated hawkish plans for rate hikes this year to tame inflation.</li></ul>The <keyword id="12472836" type="UNKNOWN" weightage="60" keywordseo="international-monetary-fund" source="Orion">International Monetary Fund</keyword> is predicting more pain for global stocks as central banks around the world tighten their monetary policies to curb rising inflation. Less accommodative policies would come as the global economy enters 2022 in a "weaker position than previously expected" on the back of a still ravaging COVID-19 pandemic, the IMF warned in a <a href="https://www.imf.org/en/Publications/WEO">new report</a> Thursday."We could certainly see further tightening of financial conditions, and that means that risk assets such as equities could sell off further," Tobias Adrian, the IMF's financial counselor and director of monetary and capital <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>, told <a href="https://www.cnbc.com/2022/01/27/imf-sees-potential-for-further-market-turbulence-as-central-banks-hike-rates.html">CNBC</a> Thursday.On Wednesday, the <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword> indicated hawkish plans for rate hikes this year to tame inflation, which is running at the fastest pace in 40 years. The central bank's <a href="https://www.businessinsider.com/federal-reserve-hints-raise-interest-rates-inflation-fomc-meeting-january-2022-1?utm_medium=ingest&amp;utm_source=markets&amp;utm_medium=ingest&amp;utm_source=markets">policy statement</a> opened the door for the Fed to start raising the benchmark rate as early as March.In the press conference that followed, Chair Jerome Powell acknowledged that inflation may stay high for longer than expected and admitted that a rate hike at every meeting of the Federal Open Market Committee this year is not off the table. US stocks quickly gave up steep gains and finished mostly lower."This is hopefully not going to be disorderly, but it's going to be an orderly adjustment in terms of valuations," the IMF's Adrian told CNBC, adding that the reaction of the markets will largely depend on the central bank's clarity.He also said an unexpected tightening of, for instance, 50 basis points, could spark a "substantial" sell-off. This pressure will likely spill over to the digital asset space, he said, which has exhibited high correlations with traditional financial markets.<a href="https://markets.businessinsider.com/currencies/btc-usd?utm_medium=ingest&amp;utm_source=markets">Bitcoin</a> <a href="https://markets.businessinsider.com/news/currencies/crypto-markets-bitcoin-ethereum-stocks-fed-hawkish-powell-solana-blockchain-2022-1">dropped as much as 5%</a> Thursday as cryptocurrencies fell across the board, with altcoins leading the way, on the back of the surprisingly hawkish comments from the <a href="https://www.businessinsider.com/what-is-the-federal-reserve?utm_medium=ingest&amp;utm_source=markets">Fed</a>.<a href="https://markets.businessinsider.com/currencies/eth-usd?utm_medium=ingest&amp;utm_source=markets">Ethereum</a>, the second-biggest digital currency after bitcoin, was 3.66% lower at $2,430 — far off its record high of nearly $5,000 in November. The wider crypto market also slumped and lost about $100 billion in total market value overnight.

You Searched For "IMF Global Policy Agenda" and got 9 results

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The IMF is predicting more pain for global stocks as central banks tighten monetary policy

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