Precarious optimism (TT Jun06 p16-17)

Global growth forecasts are robust, with share prices near to their historical highs. The markets are optimistic and the latest IMF global forecasts are unusually strong, but there are heightened tensions over Iran, new peaks in oil and commodity prices, and strong rises in bond yields. The global imbalances arising from the huge US deficit are unresolved. If central banks embark on aggressive tightening, global growth will be threatened.

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