EconomicCrisis.US

The world needs to prepare for the next economic crisis, even as it begins to recover from the worst recession since the Great Depression, the head of the International Monetary Fund said Tuesday.

IMF Managing Director Dominique Strauss-Kahn, speaking to business students at a Johannesburg university, expressed concern that recovery could mean leaders will feel less pressure to work together and pursue such reforms as tightening regulation and supervision of financial markets.

“The consensus is stronger when you’re afraid,” he said.
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The dollar is expected to advance against the yen but struggle against the euro this week after encouraging U.S. jobs data renewed investors’ confidence in the global economic recovery.

The main beneficiaries of the more positive outlook for growth are likely to be higher-yielding currencies such as the Australian and New Zealand dollar, which already Friday posted solid gains as investors, emboldened by the better-than-expected reading on the U.S. labor market, returned in strength to growth-sensitive assets.
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The U.S. economy’s recovery is likely to be slow, and the outlook is for stable inflation, Federal Reserve Bank of Chicago President Charles Evans said Thursday.

While leaving current monetary accommodation in place too long could fuel inflation eventually, removing it prematurely could “choke off recovery,” he said the prepared text of a speech in Chicago.

“I anticipate that restrictive bank credit, along with business and household caution, will continue to restrain the recovery’s strength,” Evans said. “Inflation will remain relatively stable.”
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Service industries in the U.S. accelerated in February more than anticipated, indicating the economic expansion may soon create jobs following the worst employment slump in the post-World War II era.

The factory rebound that helped the economy emerge from the recession is starting to filter to other industries, giving a boost to companies such as Macy’s Inc. Stocks, which initially climbed as another report showed job losses cooled in February, later trimmed gains after the Federal Reserve said loan demand was “weak” and labor markets “soft.”
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