America's Homeless Crisis

WHEN AMERICA SNEEZES, the world catches a cold

- Minhaz Merchant

That may not be entirely true, but as the US economy fights off fears of a recession, the rest of the world waits anxiously. Most economists, however, believe that the fear of a recession in the US is overblown. The number of Americans filing new job applications has been modest, hovering around a seasonally adjusted 2,33,000, pointing to a stable economy.

Stock markets are now pricing in an expected cut of at least 0.25 per cent in interest rates by the US Federal Reserve at its September 2024 meeting. The Fed may surprise with a 0.5 per cent cut, dropping rates to around 4.75 per cent, still high by historical standards. With initial euphoria over the “magnificent seven” stocks – Alphabet, Apple, Meta,

Microsoft, Nvidia, Tesla and Amazon – fading, markets are looking for a trigger from the Fed. A downturn in the US economy could hurt higher IT spending by American companies as the promise of generative artificial intelligence (GenAI) takes longer to unfold. That could impact Indian IT services companies which were counting on GenAI to open up new revenue streams.

The US presidential election has meanwhile split Americans down the middle. Democratic candidate Kamala Harris has established a small lead over Republican Donald Trump in the latest opinion polls. Kamala is currently ahead of Trump by an average of between two and four per cent across a dozen polls. That’s well within the margin of polling error. In a close presidential election where over 40 states out of 50 are irreversibly either blue (Democratic) or red (Republican), a handful of states will determine the next US president.