All ears: Yellen speaks during a news conference at the G7 meeting in Niigata, Japan. She warned of economic and financial catastrophe if the debt limit stalemate isn’t resolved. — BloombergIn the United States, President Joe Biden and congressional Republicans are locked in a staredown over raising the US$31.4 trillion borrowing limit.
Globally, labour shortages and the rising cost of living is triggering strikes – from train drivers in the United KIngdom to screenwriters in Hollywood. Policymakers will also discuss the ongoing battle to curtail inflation – excluding Japan – with the steepest interest-rate tightening in decades starting to hit the real economy as the long and variable lag in policy catches up with borrowers and lenders.
Perversely, if policymakers can skirt the pitfalls and keep their economies humming through to autumn, that success will only create new headaches. Optimists point to overall activity around the globe that’s better than what was expected at the beginning of the year, mostly due to Europe’s easing energy crisis, China’s sudden reopening and US jobs data that continues to defy expectations for a dip.