IMF cuts global growth forecast amid Trump tariff uncertainty and US recession fears

The Money Show's Stephen Grootes is joined by Lumkile Mondi, senior lecturer at Wits Business School.

The International Monetary Fund (IMF) has reported a slowdown in global growth as financial stability risks increase significantly.

Forecasts for global growth have been revised down markedly in its latest World Economic Outlook (WEO), compared to the one published in January this year.

This reflects tariff rates hiked to levels not seen in a century the IMF says, and 'a highly unpredictable environment'.

Its revised forecast of course comes against the backdrop of uncertainty created by US President Donald Trump's tariff war, and his new attacks on  the chairperson of the Federal Reserve, Jerome Powell, for not lowering interest rates.

The markets responded with a plunge in US stocks and the value of the US dollar, which once again boosted the gold price.

Stephen Grootes talks to Lumkile Mondi, senior lecturer at Wits Business School.

Mondi points out the irony of a powerful president who wants rate cuts so that Americans have more in their pockets, while at the same time cutting employment numbers in the US.

"He's taking away salaries and wages for many federal employees, constraining their expenditure...  We can see the confusion his policies are causing and therefore the sentiment that the biggest economy in the world is losing credibility, is not surprising."

Lumkile Mondi, Senior Lecturer - Wits Business School

At the same time, also, Trump's supporters believe that he is doing a good job as president.

"Removing Powell would be unprecedented, but he remains popular in terms of some of the polls we've seen coming through... even in view of what this is doing to the American economy as goods and services become more expensive, as jobs are lost and importantly, an economy that is cutting itself off from the rest of the world." 

Lumkile Mondi, Senior Lecturer - Wits Business School

"It just shows us the political power that has been given to President Trump."

Lumkile Mondi, Senior Lecturer - Wits Business School