Federal Reserve & Interest Rates

On a global scale, food and energy costs have gone up, and it is starting to arouse concern in the minds of the finance leaders around the world.

World hunger continues to be a problem.  Many people are already aware of the millions of people who suffer starvation in many countries around the globe.  The cost of food has gone up even more in recent months with all of the tightening financial conditions in the United States.  Global economic difficulties stemming from the housing correction in the U.S. all have an effect on inflation in other countries.  World financial leaders are concerned that the poverty and hunger crises will worsen as a result of the already prolonged economic struggles.

While a majority of Americans are able to eat on a regular basis, there are still hungry people, even on the lands of the rich United States.  The problem of hunger is an incredibly harsh reality for those in other less blessed countries, particularly on the continent of Africa.

Energy costs are of course a major problem for penny pinching families in the United States, but at least many of these families have food even if they can only afford to get half of a tank of gas for their car.

The International Money Fund (IMF) and the World Bank are having a conference this weekend to address these and other pressing issues on the global economy.  Among the 185 nations represented, our own Treasury Secretary Paulson is active in these discussions.  He offered his comments on a need for some reform:

…IMF needs to sharpen its focus on: 1) exchange rate surveillance; 2) openness to international investment, particularly meeting policy challenges posed by sovereign wealth funds; and 3) supporting global financial market stability.  The Fund must also maintain its capacity to provide balance of payments support to countries in crisis, and to promote macroeconomic stability in low-income countries, while avoiding straying into the World Bank’s development mandate…

Secretary Paulson also made mention that the U.S. is making “vigorous” efforts in assisting the economic situation.