Another weak of economic uncertainty dawns, with investors looking to central banks and sovereign governments to stimulate growth and hiring, and also to rein in longterm debt that challenges stability, two goals whose solutions may conflict more than they coincide.
Investors hope an anticipated two-day meeting of the Federal Reserve's Open Market Committee will yield a lowering of long-term interest rates. A further drop in already low costs of borrowing could trigger growth in the U.S. economy, experts told Reuters this weekend.
If anticipation of more stimulus from the Fed has some upbeat, though, there is more cause for doubt incoming from the seemingly bottomless pit of worry that is the Eurozone. While stocks there bounced up last week, new signs of trouble emerged also, including a ratcheting-back of lending from American investors to European banks, and a surge in bets against the euro. The underlying factor, says Bloomberg Businessweek, is persistent fear about the debt held by sovereign governments, particularly those like Greece that are within hailing distance of the point of collapse.
"This debt is unpayable," Mario Blejer told Businessweek, referring to Greece's burden. Blejer was the manager of the central bank in Argentina after that country defaulted on its debt.