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The Federal Reserve Chairman "US central bank" Jerome Powell that his commitment to rein in inflation It reached its highest level in 40 years "Unconditional"even though he admits that a sharp rise in interest rates may also raise interest rates The unemployment.
Powell told the House committee that "There is a risk that the central bank’s moves will cause unemployment to rise, knowing that it reached 3.6 percent during the month of May".
Experts warn that the ill health of the largest economy in the world will negatively affect the rest of the economies, and that the American economic crisis is almost reaching the stage of stagflation, and some observers warn of reaching the stage of recession, which will eventually withdraw to most countries.
Commenting on the high rates of inflation and its impact on global economiesCounselor and economic expert, Amer Al-Shobaki, said in an interview with the website "Sky News Arabia"that "What worries the world is the possibility of it entering a recession, as the rates of its occurrence within the next 12 months are high, even if compared to what happened during the Corona pandemic and the global economic crisis in 2008.".
Al-Shobaki added: "Expectations of the world entering a recession range between 45 and 50 percent, meaning that we are going into a depression during the second half of this year and throughout the next year".
He explained: "The main causes of stagnation are exacerbating, most notably the high inflation rates, which indicate that fiscal and monetary policy approaches are not sufficient to overcome the inflation monster, especially in Western countries.".
Among the other reasons mentioned by Al-Shobaki is suffering supply chains and supply around the world from a fatal structural defect, adding: "Significant rise in energy and food prices, combined with an increase in interest rates Which weakens economic growth and liquidity in the markets with the intensification of the global economic recession".
Regarding his opinion on the possibility of reaching the stage of complete depression, Al-Shobaki said: "Recession will continue for long periods, and this brings us to the crisis of the sixties and seventies of the last century and the stagflation that occurred during it similar to the current stage, but this stagnation now appears more dangerous and deep, and we can compare it without exaggeration to a period of The Great Depression In 1929".
Al-Shobaki continued: "US economic growth fell in the first quarter of this year to 2.8 percent, and it is expected to decline further in the third and fourth quarters by 1 to 1.75 percent, and do not forget here the saying that if the United States sneezes, the world catches a cold, and thus the American economic crisis will be reflected on International Economy As a whole".
On the implications of this severe crisis, the economist explained: "We are waiting for the announcement of the quarterly recession in many global economies, such as the American economy, during 12 months divided into 4 quarters. Jobs Consequently, the rates of unemployment and poverty will increase, which will have a greater impact on developing and emerging economies and on poor countries that depend mainly on loans from the International Monetary Fund in particular, and import most of their needs from abroad. Therefore, the continuation of raising interest rates and cutting off supply chains will deal severe blows to the economy. global as a whole".
Al-Shobaki concluded his speech by adding: "The US Central Bank is trying to remedy the crisis by easing taxes on the productive industrial sectors, and even on individuals and families, as there is a tendency to suspend the gasoline and diesel tax in American markets, and there are plans to stimulate some industries through tax cuts It should try to avoid a dreaded recession, and to revive the American economy".
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The Chairman of the Federal Reserve said,US central bankJerome Powell that his commitment to rein in inflation Which reached its highest level in 40 years “unconditionally”, even though he admitted that a sharp rise in interest rates may also raise interest rates. The unemployment.
Powell said before the House of Representatives committee that “there is a risk that the Fed’s moves will cause unemployment to rise, knowing that it reached 3.6 percent during the month of May.”
Experts warn that the ill health of the largest economy in the world will negatively affect the rest of the economies, and that the American economic crisis is almost reaching the stage of stagflation, and some observers warn of reaching the stage of recession, which will eventually withdraw to most countries.
Commenting on the high rates of inflation and its impact on global economiesCounselor and economic expert Amer Al-Shobaki said in an interview with “Sky News Arabia”, “What worries the world is the possibility of entering a recession, as the rates of expectation of its occurrence within the next 12 months are high, even if compared to what happened in light of the Corona pandemic and the global economic crisis in 2008.” .
Al-Shobaki added: “Expectations that the world will enter the recession stage range between 45 and 50 percent, meaning that we are going to recession during the second half of this year and throughout the next year.”
He explained, “The main causes of stagnation are exacerbating, most notably the high inflation rates, which indicate that fiscal and monetary policy approaches are not sufficient to overcome the inflation monster, especially in Western countries.”
Among the other reasons mentioned by Al-Shobaki is suffering supply chains And supply around the world from a fatal structural defect, adding: “The high prices of energy and food contribute, coupled with raising interest rates Which weakens economic growth and liquidity in the markets with the intensification of the global economic recession.
Regarding his opinion on the possibility of reaching a stage of complete depression, Al-Shobaki said: “The recession will continue for long periods, and this is what brings us to the crisis of the sixties and seventies of the last century and the inflationary stagnation that occurred during it similar to the current stage, but this stagnation now appears more dangerous and deep and we can compare it without exaggeration for a while The Great Depression in 1929″.
Al-Shobaki continued: “US economic growth fell in the first quarter of this year to 2.8 percent, and it is expected to decline further in the third and fourth quarters by 1 to 1.75 percent, and we do not forget here the saying that if the United States sneezes, the world will catch a cold, and therefore the economic crisis will be reversed. American on International Economy As a whole”.
On the consequences of this severe crisis, the economist explained: “We are waiting for the announcement of the quarterly recession in many global economies, such as the American economy, within 12 months divided into 4 quarters, and upon this announcement of the entry into a state of inflationary stagnation, global markets will be exposed to earthquake losses, and this causes great concern to the world. As a whole, it will cause loss Jobs Consequently, the rates of unemployment and poverty will increase, which will have a greater impact on developing and emerging economies and on poor countries that depend mainly on loans from the International Monetary Fund in particular, and import most of their needs from abroad. Therefore, the continuation of raising interest rates and cutting off supply chains will deal severe blows to the economy. world as a whole.”
Al-Shobaki concluded his speech, adding: “The US Central Bank is trying to remedy the crisis and address it by reducing taxes on productive industrial sectors, and even on individuals and families, as there is a tendency to suspend the gasoline and diesel tax in American markets, and there are plans to stimulate some industries through tax cuts It should try to avoid a dreaded recession, and to revive the American economy.”