The US is likely to feel the effects of sharply slowing economic growth elsewhere in the world, while the effect of US tax cuts and spending hikes diminishes, the chief economist at the International Monetary Fund has said.
Speaking in an interview with reporters ahead of his retirement from the IMF at the end of the year, Maurice Obstfeld said that he is not expecting a recession in the US, but he expects growth to progressively slow in 2019 and 2020.
“For the rest of the world there seems to be some air coming out of the balloon. That will come back and also affect the US,” he predicted.
Worries about falling growth in Europe and Asia have started to impact the US policy outlook, even as the Federal Reserve, the nation’s central bank, prepares for a likely increase in short-term interest rates later this month.
Federal Reserve policymakers have been discussing swelling “downside” risks to the largely positive US…