LIVE: CNBC's Sara Eisen moderates the IMF's Debate on the Global Economy — 10/14/21

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CNBC Television 14 October, 2021 - 12:54pm

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Pandemic is exacerbating poverty and inequalities: IMF | Business

Devdiscourse 14 October, 2021 - 08:20pm

“The crisis is exacerbating poverty and inequalities, while climate change and other shared challenges are becoming more pressing and require our urgent attention,” it added.

Strong international cooperation and immediate action are needed to expedite universal vaccination to stem the spread of the pandemic, limit divergences, and support an inclusive recovery everywhere, it said in the communique.

The IMF also promised to take steps to boost the supply of vaccines, essential medical products and inputs to developing countries and remove relevant supply and financing constraints to help them reach the global goals of vaccinating at least 40 per cent of the population in all countries by the end of 2021 and 70 per cent by mid-2022.

Addressing a press conference later, Magdalena Andersson, Minister for Finance of Sweden who chaired the meeting said the pandemic has worsened poverty and inequalities globally. The meeting called for strong international cooperation and immediate action to achieve universal vaccination, she said.

“Meanwhile, climate change is becoming more pressing and it requires our urgent attention. We made a strong commitment to further accelerate the climate action in line with the Paris Agreement,” Andersson. “Here, we will use all effective tools as fit to country‑specific circumstances. We will work together to help build a more resilient and sustainable global economy,” she said.

There is an even stronger sense of urgency when it comes to climate change, she said in response to a question.

The communique noted that they look forward to the outcomes of COP26 and commit strongly to further accelerate climate action in line with the Paris Agreement, taking into account country-specific factors.

“In this context, we will utilize policy mixes based on all effective tools, ranging from the fiscal, market, and regulatory actions, including efficient policy instruments, to reduce greenhouse gas emissions while protecting the most vulnerable,” the IMF said.

“We will also collaborate to unlock the potential of the digital economy aiming at benefits reaching all countries while managing associated risks,” it said.

“We will implement a more robust international tax architecture,” it said as the global financial leaders reaffirmed their commitments on exchange rates, excessive global imbalances and governance, and their statement on the rules-based trading system, as made in April 2021. IMF Managing Director Kristalina Georgieva told reporters that without the coordinated global response of policymakers, the world would not be on the path to recovery.

“And this is the spirit we now need more than ever before to confront multiple challenges ahead, from inflation to debt to economic divergence and the criticality at the same time when we wrestle with short‑term challenges to strive to build a more resilient, more sustainable world economy that benefits all,” she said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

IMF Seeks to Allay Doubts Following Data-Rigging Scandal, Move Forward With New Agenda

The Wall Street Journal 14 October, 2021 - 03:40pm

The IMF board cleared the group’s leader Kristalina Georgieva earlier this week for her role in a World Bank report that was manipulated to benefit China, but the scandal remains an active issue for the U.S. Treasury and some American lawmakers. “If the allegations are true that China can intimidate objective economic analysis to get its desired outcomes, that’s concerning,” said Sen. Jim Risch of Idaho, the ranking Republican on the Senate Foreign Relations Committee.

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IMF Seeks to Allay Doubts Following Data-Rigging Scandal, Move Forward With New Agenda

POLITICO 14 October, 2021 - 03:40pm

The IMF board cleared the group’s leader Kristalina Georgieva earlier this week for her role in a World Bank report that was manipulated to benefit China, but the scandal remains an active issue for the U.S. Treasury and some American lawmakers. “If the allegations are true that China can intimidate objective economic analysis to get its desired outcomes, that’s concerning,” said Sen. Jim Risch of Idaho, the ranking Republican on the Senate Foreign Relations Committee.

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IMF warns economy recovery threatened by virus, inflation

The Spokesman-Review 14 October, 2021 - 01:12pm

WASHINGTON — The International Monetary Fund is warning of rising threats to the global economic recovery posed by the ongoing coronavirus pandemic and an outbreak of inflation.

The lending agency called Thursday for greater efforts from wealthy nations to boost coronavirus vaccination rates in poorer countries, while also urging the Federal Reserve and other central banks to respond quickly if current inflation pressures prove not to be transitory.

The IMF panel that sets policy for the 190-nation organization wrapped up its annual meeting with a joint statement expressing concerns about the wide divergence in vaccination rates between wealthy and poor countries.

The group urged greater efforts by wealthy nations toward achieving a goal of having 40% of the population of all countries vaccinated by the end of this year and 70% by the middle of next year.

While nearly 60% of the population in advanced economies are now fully vaccinated, only about 4% of the population in poorer countries are.

“We will take steps to help boost the supply of vaccines and essential medical products and inputs in developing countries and remove relevant supply and financing constraints,” the finance officials pledged.

“The emergence of virus variants has increased uncertainty and risks to the recovery are tilted to the downside,” the group said. “The crisis is exacerbating poverty and inequality.”

The United States was represented at the finance meetings by Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.

The finance officials also noted rising global inflation pressures and said the Fed and other central banks need to “act appropriately” if the price spikes prove to be more of a threat to the economic recovery.

The Fed signaled last month that it soon could begin the process of unwinding some of the extraordinary support it put in place in response to last year’s coronavirus-triggered recession. The move would be a first step toward possible interest rate hikes that would slow growth and keep inflation under control.

The IMF issued an updated economic forecast this week that slightly downgraded its forecast for global growth to 5.9% from 6% in July.

The downgrade reflected persistent supply chain disruptions and the wide disparity in vaccination rates. For the United States, the IMF forecast growth of 6% this year, down from its July forecast of 7%.

The IMF policy panel also endorsed the findings of the agency’s executive board on Monday of “full confidence” in IMF Managing Director Kristalina Georgieva.

The support for Georgieva came following an investigation into allegations that, while a top official at the World Bank, she and other World Bank officials pressured staff to boost the rankings of China and other countries in an influential business-climate survey that has since been discontinued.

Georgieva told reporters Wednesday that the review showed there was no “there there” to the charges. But Yellen said in a speech Thursday to the IMF policy panel that the results of the review by an outside law firm “could reduce confidence in the international financial institutions if there is not strong action to boost accountability, protect data integrity and prevent misconduct.”

Critics have cited the incident to support their contentions that China and other nations are seeking to exercise improper influence over the IMF, the World Bank and other international financial institutions.

Yellen said the IMF and the other organizations need to find ways to enhance the rights of whistleblowers.

“The United States will monitor developments closely and evaluate any new facts and findings should they become available,” Yellen said.

Anti-poverty groups on Thursday expressed disappointment that the IMF was not more specific on how the agency plans to boost vaccination rates and provide increased resources to fight climate change.

“Given how the pandemic is becoming worse in most of the world’s countries, I’m concerned by the lack of action at the meetings on vaccine distribution, debt relief and general pandemic response,” Eric LeCompte, executive director of the religious development group Jubilee USA Network, said in a statement.

“It’s baffling that we still don’t have plans for the funding and distribution of vaccines to reach all developing countries,” LeCompte said.

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Behind inflation RBA as world wakes up!

FXStreet 13 October, 2021 - 11:07pm

We really have only to pin the latest US inflation chart to the top of our report from yesterday, to fully understand and confirm what is going on in the world.

In the past two days, the IMF has lowered its growth forecasts and issued a major warning on inflation, while at least one Fed President has stated the current wave of inflation is clearly not transitory. Fed minutes showed tapering is likely this year.

We always forecast tapering this year and hikes next year, even though the Fed didn't know it yet. Just today, Goldman Sachs said inflation is the biggest risk facing the economy and markets. We said it three months ago. Wall Street is very much behind the curve on this.

Some central banks are on the right page. Mexico, New Zealand, South Korea among several who have already begun raising rates. They are doing so, because they recognise that the current relatively low settings are no longer necessary. At the same time, it is highly problematic to have emergency stimulus levels of official rates when inflation has clearly turned a corner and is rising quickly.

While some would argue central banks are in a difficult position? That simply reflects an ability to see a new world where central banks need to behave more dynamically. Did I just say that? Suggest a dynamic central bank?

Well, let's move to the other end of spectrum where we have the entirely absurd and world first in central bank policy, of the Reserve Bank of Australia having declared on numerous occasions that it will emphatically not raise rates from the emergency 0.10% setting, until 2024?

Why does the financial media and economic debate in this country allow our central bank to be so extreme, as to enshrine stubbornness, and tie its own hands to an inability to respond appropriately.

A slow central bank that is badly behind the curve can do tremendous long term damage to the economic well being of a national economy and to the lives of its citizens. It is vitally important that Australia rediscovers open and when necessary critical debate of our central bank's performance. Just like every other country in the world has.

Whether rates should be raised or not, occurring in 2022, as it I believe they should, or in 2024, is really beside the point. Having a policy of declaring it will not change its policy setting for some 2-3 years, is completely at odds with good governance.

The ECB is shifting toward removing bond buying and starting to think rate hikes will be appropriate at some point. New Zealand has already hiked. The US Federal Reserve is beginning to admit it got the inflation story wrong. Just as we forecast they would be doing, several months ago. The pressure building on the RBA to abandon its ridiculous 'sit on its hands' policy is building.

We should expect the Federal Reserve Bank of the USA to begin to raise rates in the first half of 2022.

We should expect the Reserve Bank of Australia to exit its extreme, by all global standards, policy of doing nothing within weeks. If it takes any longer, then inflation will really become an entrenched problem.

The RBA needs to abandon its no change til 2024 policy immediately.

And begin to warm the market to the idea that it may well be raising rates in the first half of 2022. There simply is no argument for the level of official rate stimulus we currently have, for an even below trend growth path.

Which, by the way, remains my forecast for the Australian economy. Sluggish economic growth and high inflation.

Equity markets simply bounced around in the recent range during the US session. It has become a virtual mantra to expect some initial strength that will fade over a 24-48 hour time horizon.

If you missed yesterday's report, I strongly urge a quick look.

At 5.4%, increasingly looking more of the permanent and worrying kind.

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EUR/USD has shot higher in the last few sessions but the rally has stalled and left a doji topping candle on the daily chart. A period of sideways accumulation could be on the cards for the near term. 

The GBP/USD retreats from the daily high around 1.3733, advances 0.20% during the New York session, trading at 1.3688 at the time of writing. The British pound could not hold to the 1.3700 level, broke the latter in a counter-trend move, which in 4-hours witnessed a 60 pip drop.

The price of gold is flat in the Tokyo open on Friday, trading near $1,796 as the price consolidates its recent rally from out of consolidation near $1,750. The highs of the rally were $1,800 stored the prior European session. 

How are future XRP price levels determined if they have never traded at those price levels before? A series of different types of analysis should be completed to speculate and project a future price range. For this analysis, I will be utilizing Elliot Wave Theory, natural harmonic values found in the light and sound spectrum.

Rising energy prices have done little to stifle market optimism today, with improving US banks earnings and jobless claims helping sentiment.

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