What to Expect from G-20 Meetingby Tim Manni
Leaders from twenty nations will convene in Washington today and tomorrow to discuss the state of the global economy, and hash-out future efforts to quell an economic crisis that has affected most of the globe. What makes this meeting interesting is the U.S. is on the cusp of changing leaders — a shift that has many global economies looking for clues to what U.S. economic policies may be in store in the near future.
A clear-cut, decisive strategy to sure up global economies could play very well for the markets, but whether that could be accomplished in less than 48 hours of discussion is unlikely:
Still, markets are looking for more fiscal stimulus packages, such as China’s $586 billion plan unveiled this week. Officials in a number of European countries have indicated in recent days they are considering stimulus packages, which if coordinated could carry greater punch to stoke the global economy.
Again, what makes this meeting interesting and important is that the Bush Administration has not exactly supported a second stimulus. Yet with President Obama and a Democratic Congress coming into power in two months, global nations could likely push the initiative as a group effort.
Whether this summit will result in another global initiative to lower key interest rates remains unknown at the moment. U.S. Federal Reserve Chairman Ben Bernanke addressed the European Central Bank this morning, reiterating the Federal Reserve’s willingness to take additional step to sure up markets.
“However, the continuing volatility of markets and recent indicators of economic performance confirm that challenges remain. For this reason, policymakers will remain in close contact, monitor developments closely, and stand ready to take additional steps should conditions warrant,” said Bernanke.
Other expectations include a boost to the International Monetary Fund. A follow-up meeting should be expected shortly after January 20. Be sure to read Simon Johnson’s expectations of what he considers “would constitute success and what would imply failure at the G20 heads of government meeting.”