하나은행 하나금융연구소

Rising uncertainty over the US economy

With persistent worsening of its fiscal soundness, the US may suffer growing sovereign risk. 
-Downgrade of the US credit rating had only a limited impact on the market, overshadowed
by the fiscal crisis in Europe. 
-However, there still remains concerns over failed efforts to agree on austerity measures and
challenges in achieving mid to long-term fiscal soundness.

There are heightened concerns over potential contagion of the eurozone crisis into the US
financial sector.
-Since the European crisis started to unfold in a full scale, the US financial sector has faced
greater concerns owing over its exposure to the eurozone. 
-Slowdown of MMF business and CP issuance in the US further aggravated concerns over
a squeeze in the short-term capital market.

Despite positive economic indicators of recent days, there are growing concerns over slow growth
of the US economy. 
-Structural factors and worsening conditions including higher unemployment and sluggish housing
market have weakened its resilience.
-Although not likely to experience a Japanese-style depression, the US economy should suffer low
growth for a prolonged period. 

US-originated risk dreaded as a potential nuclear bomb for the global economy

Risk factors of the US economy were triggered by the aftermath of the financial crisis and intensified
by the eurozone crisis.
-Weakened fiscal soundness in the wake of massive stimulus packages implemented during the
financial crisis is not likely to show any signs of improvement even after the crisis.
-Furthermore, the eurozone crisis is delaying economic recovery and may even lead to transfer of risk.

Spread of uncertainty from the US can bring about shocks of a greater scale than the euro crisis.
-With rising sovereign risk, a higher government bond rate may cause global interest rates to rise.
-A spread of the eurozone crisis is likely to trigger global liquidity crisis amid aggravated liquidity
squeeze in the US.
-Reduction in gross demand and contraction in trade, attributable to low growth, should have negative
impacts on the global economic growth.

(This report is the 2nd one in 3 Global Risk Series reports.)