Skip to main content
Tags: Economic | slowdowns | markets | governments

Global Economic Slowdown Rattles Financial Markets, Governments

By    |   Monday, 13 October 2014 09:14 PM EDT

Economic sluggishness that is prevalent around the world outside of the United States is vexing financial markets and governments alike.

While the U.S. economy grew at a hefty 4.6 percent annual rate in the second quarter, the eurozone registered zero growth and Japan's economy contracted at a 7.1 percent rate.

That has helped push the S&P 500 stock index down 5.8 percent down from its Sept. 19 high. Meanwhile, U.S. crude oil prices have fallen to a two-year low, and the dollar soared to a six-year high against the yen and a two-year peak against the euro two weeks ago.

While the U.S. economy has been little affected so far, Federal Reserve officials have voiced concern that the damage will spread to our shores.

And that could push the Fed to delay an increase in interest rates.

"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to [start lifting rates] more slowly than otherwise," Fed Vice Chairman Stanley Fischer said during IMF meetings last weekend, The Wall Street Journal reports.

Most economists expect the Fed to raise rates around mid-2015.

So what's behind the global economic stagnation? Washington Post columnist Robert Samuelson cites three important factors.

• "One is the hangover from the 2008-2009 financial crisis," he writes. "Sobered and scared, people and businesses delay consumption and investment."

• Second is "the legacy of global trade imbalances in the 1990s and early 2000s, when China and some other countries ran huge surpluses and the United States and some others ran huge deficits," Samuelson writes.

• Third is "the cost of maturing welfare states," he says. That applies to the United States, Europe and Japan.

Related Articles:

© 2025 Newsmax Finance. All rights reserved.


Finance
Economic sluggishness that is prevalent around the world outside of the United States is vexing financial markets and governments alike.
Economic, slowdowns, markets, governments
303
2014-14-13
Monday, 13 October 2014 09:14 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the Newsmax App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved