U.S. Interest Rates

With Global Financial Markets, How Much Control Do Countries Have Over Economic Policies?

Versions in عربي (Arabic), Français (French), Русский (Russian), and Español (Spanish)

The outlook for further interest-rate increases by the US Federal Reserve revives interest in a compelling question: In an increasingly integrated global financial system, how much control do countries outside of the US retain over their economic policies?

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By IMFBlog| April 6th, 2017|Economic research, Financial markets, financial policy, Financial regulation, IMF, U.S., Uncategorized|0 Comments

How to Manage the Commodity Roller Coaster

by Vitor Gaspar

(Versions: عربي, 中文, Français, Русский, and Español)

The world economy is experiencing important transitions and associated uncertainties.

Commodity prices have fallen sharply, with adverse consequences for exporting countries.
China’s rebalancing and the prospect of U.S. interest rate increases are having important and costly spillover effects on other economies.
And these and other factors are posing important fiscal challenges, especially for emerging markets.

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By IMFBlog| October 7th, 2015|Advanced Economies, Annual Meetings, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, Financial Crisis, Fiscal policy, growth, IMF, International Monetary Fund, Latin America, Public debt|0 Comments

U.S. Monetary Policy: Avoiding Dark Corners

By Ali Alichi, Douglas Laxton, Jarkko Turunen, and Hou Wang

Copyright : © fStop Images GmbH / Alamy A few weeks ago, the Fund suggested that the Federal Reserve could defer its first increase in the policy rate until it sees greater signs of wage or price inflation, with a gradual increase in the federal funds rate thereafter. Such a monetary policy strategy could help avoid the “dark corners” in which, as Olivier Blanchard has argued, small shocks can have potentially large effects. In this blog and accompanying working paper, we expand upon this idea. We also outline the potential benefits of an expanded communications toolkit.

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By IMFBlog| June 25th, 2015|Advanced Economies, Economic Crisis, Economic outlook, Economic research, Employment, Financial Crisis, Fiscal policy, Government, growth, IMF, International Monetary Fund, Investment, Public debt|0 Comments

A Watershed Moment for Latin America: Nine Takeaways from our High-Level Conference

By Alejandro Werner

(Versions in Español and Português)

Latin America has reached a critical moment. So much better off than two decades ago, and still facing deep-seated problems that get in the way of sustained strong growth and economic development. To better understand these problems from countries’ perspectives, and explore ways the IMF and others can help address them, we brought together experts from the region and beyond—central bankers, finance ministers, and academics—for a high-level conference in Washington, D.C. earlier this week.

Under the theme of “Rising Challenges to Growth and Stability,” participants engaged in lively debates about the current difficulties facing Latin America and the policy priorities for now and the future.

Here are my main takeaways from the event:

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By IMFBlog| June 5th, 2015|Advanced Economies, Economic Crisis, Economic outlook, Emerging Markets, Employment, Español, Finance, Fiscal policy, Globalization, growth, IMF, International Monetary Fund, Reform|0 Comments

Managing Capital Flows in Frontier Economies

By Jonathan D. Ostry, Atish R. Ghosh, and Mahvash S. Qureshi

There has been a remarkable increase in financial flows to frontier economies from private sources which, in relation to their economic size, are now on par with those to emerging economies (see chart).

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By IMFBlog| April 29th, 2015|Africa, Asia, Economic Crisis, Economic outlook, Economic research, Emerging Markets, growth, IMF, International Monetary Fund, Low-income countries, Uncategorized|0 Comments

Taper Tantrum or Tedium: How U.S. Interest Rates Affect Financial Markets in Emerging Economies

By Alexander Klemm, Andre Meier, and Sebastián Sosa

(Version in Español)

Governments in most emerging economies, including in Latin America, have reduced their exposure to U.S. interest rates over the past decade, by issuing a greater share of public debt in domestic currencies.

Even so, sudden changes in U.S. interest rates still have the power to roil financial markets in emerging economies. Witness last year’s “taper tantrum”—when the Fed hinted at the possibility of tapering its bond purchases sooner than previously expected, causing bond yields to rise sharply. Continue reading “Taper Tantrum or Tedium: How U.S. Interest Rates Affect Financial Markets in Emerging Economies” »

By IMFBlog| May 22nd, 2014|Economic outlook, Emerging Markets, Fiscal policy, Government, growth, International Monetary Fund, Uncategorized|0 Comments