US Congress (expressive)
America’s economy
He emphasized that American companies must be prepared for the worst
The US Congress is again arguing about raising the debt ceiling, which is how much money the US government can borrow to pay its obligations on time. This means that American companies must be prepared for the worst.
The CEO of Bank of America (BAC), the second largest bank in America, said in statements to “CNN”, seen by “Al Arabiya.net”, that he hopes that lawmakers will solve their problems, because the market and the economy love stability. However, the country’s debt default remains a possibility that cannot be ignored.
A short deadline for emerging markets.. The world’s largest hedge fund warns of this!
“We have to be prepared for that, not just in this country but in other countries around the world,” Brian Moynihan added on Monday. “We hope it doesn’t happen, but hope is not a strategy – so you have to prepare for it.”
President Joe Biden may address the topic in his State of the Union address on Tuesday. US Treasury Secretary Janet Yellen has already warned Congress that the country could default on its fiscal obligations as early as June if the debt ceiling is not raised before then.
Yellen later said there could be a “global financial crisis” if there was no agreement on debt limits. The Treasury is now taking “extraordinary measures” to keep the bills paid on time.
The recent drama over the debt ceiling has led to calls for the government to get rid of it completely. The argument is that political differences should not prevent the US from meeting its financial obligations.
Moynihan is not a fan of this idea: “There should be an argument about how do we make sure we live within our means as a country” when asked whether the United States should cancel the debt ceiling or not, according to Al Arabiya.net.
financial leads
Congress has the financial leads. I would be cautious about trying to restructure the US Constitution,” according to Moynihan. “I think we have to make sure it works properly.”
But he acknowledged that the government needs to spend a lot on various stimulus programs since 2020 due to the Covid-19 crisis, saying that the United States has had to take on “a lot of debt over the past two years to overcome the epidemic” as a burden on the economy, “according to what was read by” Al-Arabiya. .net”.
The economy has rebounded sharply from the depths of the short Covid downturn. So much so that inflation is now the biggest problem facing the country, and so is the Federal Reserve.
The Fed has raised interest rates aggressively over the past year in an effort to bring inflation down to target levels. Interest rate hikes are starting to bear fruit, but the US labor market is still shockingly strong.
“The unemployment rate has remained very low. Very low,” Moynihan said. “That’s one of the challenges the Fed faces.”
moderate recession
With that in mind, Moynihan said, Bank of America still expects a “mild recession” at some point in the future. He argues that high rates can be a drag on corporate profits, but the good news is that most people are still working, earning and spending well.
Moynihan does not seem overly concerned that any geopolitical tension between the US and China stemming from the recent spy balloon incident will have a lasting impact on the global economy.
He told that given China’s importance in the global supply chain, it is in everyone’s interest that no economic tensions escalate.
