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Report to Congress on International Economic and Exchange Rate Policies

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Report to Congress on International Economic and Exchange Rate Policies

US Treasury,

15 min read
10 take-aways
Audio & text

What's inside?

The official US take on global economic and exchange rate policies in late 2013 looks at current trade imbalances.

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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
  • Overview

Recommendation

This semiannual report from the US Department of the Treasury assesses changes in the economic and exchange rate policies of the US’s 10 most significant trading partners. Trade with those economies accounted for “72% percent of US merchandise” imports and exports in 2012. The report finds that no major US trading partner is currently manipulating its currency against the dollar, and – in its most newsworthy aspect – it cautions any country that might consider such manipulation to improve its balance of payments or to gain trade advantages. The report focuses on the trade and capital imbalances that currently affect global economic growth. It’s region-by-region appraisal focuses on such topics as the euro zone’s imbalances and the need for China to be more flexible about its exchange rate. The report gets to its real core when it explains how governments can adjust their economic policies to achieve strong and sustainable growth. getAbstract recommends this authoritative analysis to global executives, bankers, currency managers and anyone intrigued by the US’s take on issues affecting global trade, finance and the economy.

Summary

The US Economy

The second half of 2012 saw 1.5% growth in the annual rate of real US GDP. This trend continued into 2013, with a 1.8% increase for the first half of the year. Growth in businesses’ capital spending, consumer spending and residential property purchases drove an expansion of private domestic demand, which helped to offset the slowdown in government spending over the same period. Forecasters suggest that this trend, which was expected to continue in the second half of 2013, will become stronger in 2014, with anticipated growth nearing 2.8% that year.

The housing market continued to improve in the first half of 2013, although at a slightly slower pace than in 2012. A number of factors contributed to the increased activity and higher prices in residential real estate in 2012 and 2013: Mortgage interest rates remained relatively low, the private sector created more jobs and credit became more available. Rising house prices have taken more households out of negative equity, reducing the number of mortgages in distress and boosting consumer confidence. But increased prices have contributed to a 20% drop in affordability measures since the start of 2012, though...

About the Author

The Department of the Treasury is the executive agency that promotes economic prosperity and ensures the financial security of the US. The Treasury is required to deliver semiannual reports covering the economic and currency policies of the US’s major international trading partners.


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