The FED and the IMF warn that the US will lose up to the point of growth with the government closing – 01-19-1919



[ad_1]

Donald Trump's government continues to worry about that establishment. To critics of the commercial war with China and the protectionism that produced shakes on Wall Street, the warning is now added to by the high costs to be paid to the North American economy by the closure of the government.

The closure took 28 days of administrative cessation and has "become a barrier to economic growth," warned the head of the New York Federal Reserve Bank, one of the key members of the Fed, the US central bank.

John Williams, who also serves as vice president of the Federal Reserve's policy committee, said government unemployment could reduce GDP growth by one percentage point in the first quarter. He added that the steps adopted by Trump had been one of the "winds against growth."

The president created the conditions for this closure by demanding that presumptuous people enter around 5,500 million dollars to build a wall on the national border with Mexico. But, according to analysts, the fence is only a pretext. The president's intention was to produce a strong defeat against his political opponents once they took control of the strategic House of Representatives.

Nancy Pelosi, president of the House of Representatives. AP

Nancy Pelosi, president of the House of Representatives. AP

The Democratic leadership, led by Nancy Pelosi, the site's president, opposes the wall, scoffs at his needs and says there are other alternatives to solving immigration problems. So the budget is not approved as expected. Trump denounced the humanitarian tragedy on the border. But statistics show that migration is far less now than in the past what would be confirmed by political maneuvers.

Williams bankers continue to predict that such closures will reduce GDP growth by half a percentage point, "maybe even a percentage point if it continues," but said he hoped the rebound would occur when it ended.

Economists say that beyond the loss of salary for federal workers, due to the absence of budget items, the closure blocked systemic economic activity. That is because it disrupts the issuance of permits, data collection, regulatory approvals, payment of contracts and payment of grants and loans in various sectors, such as agriculture.

On Thursday last week, the International Monetary Fund (IMF) also warned the White House that the adverse effects of the closure would worsen as it continued. Last month, the Federal Reserve forecast growth of 2.3 percent for 2019, especially slower than in 2018.
New York agency

[ad_2]

Source link