DUBLIN (Reuters) – Worsening global geopolitical tensions could weigh on already weak growth in Europe and China, and change the trajectory of the U.S. economy, Lisa Cook, a member of the Board of Governors of the Federal Reserve, said on Wednesday.
“What happens in the rest of the world impacts the United States, and right now economic growth is pretty weak among our major trading partners,” Lisa Cook said during a roundtable discussion. by the Central Bank of Ireland in Dublin.
“We’re not only keeping an eye on slowing growth, we’re also monitoring geopolitical tensions that could change the outlook for the United States and the global economy.”
Lisa Cook added that geopolitical tensions could notably destabilize commodity markets and access to credit in the current context of high interest rates.
“Any shock could worsen the situation we already find ourselves in (…) and could destabilize commodity markets, as well as the credit system,” she explained. “We are vigilant.”
The comments followed a speech in which the governing council member outlined a number of geopolitical risks, including conflicts in Ukraine and the Middle East, as well as persistent inflationary pressures and economic slowdown in China, which could, according to her, threaten global financial stability.
She did not detail her view of the US economic outlook, nor comment on the Fed’s monetary policy, nor give an idea of the likelihood of these risks materializing.
Most of his speech repeated that of Monday. Lisa Cook then described a financial sector that was largely resilient although subject to certain risks, particularly from non-bank financial institutions and commercial real estate. Lisa Cook also mentioned the strength of households, although some tensions appear for households with lower credit scores.
(Reporting Padraic Halpin and Conor Humphries in Dublin, Ann Saphir in San Francisco, French version Corentin Chappron, edited by Jean-Stéphane Brosse)
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