Lagarde calls for US debt resolution

IMF chief Christine Lagarde today urged the United States to quickly resolve a political stalemate over raising the debt ceiling, warning that failure to reach an agreement would have serious consequences for the world economy.

“The clock is ticking and clearly the issue needs to be resolved immediately,” she told the Council on Foreign Relations according to a text of her remarks.

Ms Lagarde, who has been in the job for less than a month, called on the United States to develop a credible fiscal adjustment plan but cautioned against being too hasty.

“The United States could face another jobless recovery. That is why we’ve advised against fiscal consolidation that is unduly hasty – even as we stress the importance of getting a fiscal consolidation plan agreed soon,” she said.

Her warning on the dangers of not raising the $14.3 trillion debt ceiling by August 2nd came as the dollar fell across the board after US president Barack Obama gave no sign of a breakthrough in deadlocked talks in a televised speech late last night.

The US faces a technical default on some of its government bonds outstanding unless it raises the debt limit.

Irish Times

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell