Gerald Celente: Danger Ahead, Banking Sector Crisis… IMF: The Situation Is Quite Fragile

Gerald Celente: Danger Ahead, Banking Sector Crisis… IMF: The Situation Is Quite Fragile

By Investment Watch Blog

US Credit Conditions to Weaken to Post-Pandemic Low, Banks Say

• Bank economists see tighter credit for businesses, consumers
• Survey was taken after recent banking stress, trade group says

IMF chief economist: “below the surface…turbulence is building, and the situation is quite fragile as the recent bout of banking instability reminded us,” adding that the odds of a recession have “risen sharply.”

The International Monetary Fund (IMF) released its April World Economic Outlook on Tuesday, and its researchers didn’t hold back, warning that stubborn inflation could keep interest rates higher for longer, leading to a “hard landing” for the global economy. Their report contrasts with Goldman Sachs’ recent forecast that labor market rebalancing will enable a “soft landing” in the U.S.—where inflation is tamed without sparking a recession—as well as Barclays’ February projection for a “no-landing” scenario that involves resilient economic growth and higher inflation. And in some ways, the IMF’s new outlook disregards a genuinely constructive trend on inflation.

Many central banks worldwide have made progress in their fight against rising consumer prices in recent months. In the U.S., year-over-year inflation dropped from its 9.1% June peak to just 6% in February. And the European Union saw its key inflation measure sink to 6.9% last month, from 8.5% in February. But the IMF’s economists still believe inflation will be an issue for years to come. In developed economies, they forecast, it will take until after 2024 for consumer price increases to fall to central banks’ 2% target—and the situation will be even worse for developing nations.

Global economic growth will also fall from 3.4% in 2022 to 2.8% in 2023, according to the IMF, before leveling off at 3% in 2024. The fund’s director, Kristalina Georgieva, noted last week that the forecast amounts to the weakest medium-term global growth projection in over 30 years.

US Small Businesses Face Worst Credit in a Decade After SVB

• NFIB survey shows a net 9% of firms said loans harder to get
• Larger share sees tighter credit conditions in coming months

More US small businesses reported having greater difficulty getting a loan in March after multiple bank failures led to a further tightening of credit conditions.

A net 9% of owners who borrow frequently said financing was harder to get compared to three months earlier, the most since December 2012, according to a survey from the National Federation of Independent Business out Tuesday. The same share expects tougher credit conditions in the next three months, matching the highest level in a decade.

“Desperate for a scapegoat, banks under immense duress are increasingly pointing the finger at certain websites. But the truth is they have been the architects of their own downfall.”