USA (Washington Insider Magazine) – The U.S. economy is not slowing down, but it is not remotely close to recession. In response to slowing growth and rising unemployment, the Federal Reserve prepares to lower interest rates to boost the economy. Wall Street now mainly anticipates that the United States will accomplish a soft landing, preserving economic stability, despite early worries.
According to Theguardian, financial markets may be overly focused on U.S. recession risks, missing more significant threats from abroad. Escalating tensions in the Middle East, particularly the conflict in Gaza, have the potential to expand into a larger regional conflict, which could affect global oil supplies. Meanwhile, China’s economic outlook has deteriorated, influencing international markets.
China’s Growth Model Faces Structural Challenges
Once a worldwide development engine, China’s economy is facing serious structural problems. Overproduction has resulted from the nation’s reliance on cheap financing and state-driven industrial investment, especially in manufacturing and real estate industries. As a result of the surplus capacity that resulted, prices are currently declining, earnings are declining, and economic stress is rising.
Western Protectionism Complicates Global Trade Dynamics
Western countries are adopting more protectionist policies, such as imposing taxes on Chinese exports and providing subsidies to domestic businesses, as China battles its internal economic issues. Increased trade tensions may result from this change, and China may take retaliatory measures. The global economic landscape is at risk of becoming more volatile as these tensions intensify.
If current trends continue, the global economy could face a significant challenge. Protectionist policies may drive up prices and inflation, while efforts to boost domestic production in the West could exacerbate global overcapacity. This scenario risks leading to a downturn in profitability, echoing predictions of economic crises seen in previous eras.
