America
Policymakers gather in Washington as Middle East tensions swell
The spring meetings of the World Bank (WB) and the International Monetary Fund (IMF) are taking place in Washington from 17-19 April.
Finance ministers and central bank governors from around the world are attending the spring meetings, and among the topics on the agenda are debt relief for countries in difficulty, the Ukraine issue and what to do with Russia’s confiscated assets.
Of course, the interest rate/inflation cycle and the fate of possible interest rate cuts by the US Federal Reserve are also on the agenda. Equity markets were thrown into a bit of turmoil this week when Fed Chairman Jay Powell signalled that the Fed was in no hurry to cut interest rates.
According to IMF President Kristalina Georgieva, the Fed is doing the right thing. “The Fed is not yet ready to cut, and rightly so,” Georgieva told Bloomberg on Thursday.
Noting that the key question at the Washington meetings is “how long the Fed will keep rates high”, the IMF chief said “all countries are talking about it and all eyes are on the US”.
Georgieva argued that the strengthening of the dollar was “of course worrying” and said that the economy was “somewhat overheating”, partly due to the US fiscal stance.
Georgieva added that she remains optimistic that conditions in the US will allow the Fed to start cutting interest rates later this year.
Georgieva calls for fiscal tightening
Georgieva also called on advanced economies, which have greatly increased their debt levels in recent years, to tighten their fiscal policies to deal with the pandemic crisis.
“Countries urgently need to build fiscal resilience for the next shock. It is important to rebuild fiscal buffers,” she said.
According to Georgieva, she argued that central banks struggling with inflation could also “get some help from the fiscal side”.
Georgieva’s comments before the start of the meetings were also relatively “pessimistic”. According to her, “a stagnant and disappointing decade” lies ahead. Without a course correction,” the IMF chief said, “we are heading for the tepid twenties”.
Georgieva’s comments echoed the findings of the IMF’s World Economic Outlook report. The report said: “Faced with a variety of headwinds, the outlook for future growth has also deteriorated. Looking ahead five years, global growth is projected to slow to just over 3 percent by 2029. Our analysis suggests that by the end of the decade, growth could be about one percentage point below the pre-pandemic (2000-19) average. This threatens to reverse improvements in living standards, while the imbalance of the slowdown between richer and poorer countries could limit prospects for global income convergence,” the report says.
The report stresses that a prolonged low-growth scenario, coupled with higher interest rates, could threaten debt sustainability and limit the ability of governments to tackle economic stagnation and invest in “social or environmental initiatives”.
Development of poor countries will have to wait for another spring
Half of the world’s 75 poorest countries have seen their income gap with the richest economies widen for the first time this century, marking a historic reversal in development, the World Bank said in a report published on Monday.
According to the report, the gap between per capita income growth in the poorest countries and per capita income growth in the richest countries has continued to widen over the past five years.
Ayhan Kose, deputy chief economist at the World Bank and one of the report’s authors, told Reuters: “For the first time we see that there is no convergence. They are getting poorer. We are seeing a very serious structural regression, a reversal in the world … so we are ringing alarm bells here,” Mr Köse told Reuters.
The report said 75 countries eligible for grants and interest-free loans from the World Bank’s International Development Association (IDA) risked a lost decade of development without ambitious policy changes and significant international support.
Köse said that growth in many IDA countries had already started to decline before the COVID-19 pandemic, but that 2020-2024 will see the weakest half-decade of growth (3.4 per cent) since the early 1990s.
More than half of the IDA countries are in sub-Saharan Africa, 14 in East Asia and eight in Latin America and the Caribbean. Thirty-one of these countries have a per capita income of less than $1,315 per year. These include the Democratic Republic of Congo, Afghanistan and Haiti.
Conversely, in addition to the ‘tactical’ considerations that the Fed must take into account when determining its interest rate policy, fluctuations in bond markets indicate that a significant rethink may be required regarding the eventuality of interest rates once the latest inflationary wave has passed.
The two-year US Treasury yield, which is highly sensitive to short-term Fed policy, has risen in recent months as might be expected. However, longer-term yields have followed the same pattern.The 10-year US Treasury bond, which stood at 3.87% at the beginning of February, was yielding 4.63% two days ago.With the exception of a few weeks last autumn, long-term yields have not been this high since 2007.
In 2009, when the economic crisis was devastating the global economy, long-term Treasuries offered higher yields than in 2016, when they were ‘reasonably healthy’. The consensus view at the Fed was that a policy of 5 per cent or higher interest rates would constrain economic activity and put inflation on a downward path.Inflation data and bond market behaviour undermine this view. There is a widespread view that high interest rates may not be as much of a drag on the economy as had been thought, but rather reflect a ‘new normal’.
America
US wealthy demolish multimillion-dollar mansions for land
Wealthy buyers in the US are tearing down multimillion-dollar homes shortly after purchasing them for hundreds of millions of dollars.
According to a report by The Wall Street Journal, the trend is driven by a shortage of land in prestigious locations, particularly along coastlines.
For ultra-wealthy buyers, the prime factor has become the land’s location rather than the structure standing on it. After the acquired properties are flattened, newer, more modern homes are built on the cleared lots.
Drawing attention to the shift in the luxury real estate market, the report noted:
“The home itself, formerly the primary driver of an expensive real estate purchase, is now almost beside the point. Buyers are competing first and foremost for well-located land, situated on the ocean or a mountaintop.”
The newspaper cited moves by US billionaire William Lauder as an example. Lauder purchased the oceanfront estate of radio host Rush Limbaugh, who died in March 2023, for $155 million and had it completely demolished in July.
Lauder had previously torn down two homes situated on roughly 1.2 hectares of land along the Palm Beach coast. Having initially planned to construct his own residence on the parcel, Lauder subsequently sold the cleared plot for approximately $200 million.
Jonathan Miller, a real estate appraiser, stated that such transactions are becoming increasingly common as land prices rise.
Amid this momentum, estate agents have also begun marketing luxury homes directly as teardown lots.
Listings use artificial intelligence-generated imagery to showcase how the land would look without the structures on it.
Marketers avoid using the word “demolition” directly, resorting instead to terms such as “adaptive reuse”.
Teardown listings rise across luxury housing market
The trend is not confined to the coast and is spreading to other regions across the US.
Data from property brokerage Redfin reveals that references to demolishing buildings are becoming more frequent in sales listings.
The share of such listings exceeds 15% in the Bunker Hill Village area of Houston, while standing at 6.67% in Pimmit Hills, Virginia.
Dina Goldenteyer, a real estate agent working in Miami, remarked that serial demolitions have become more frequent because buyers no longer appreciate homes older than a decade.
Former retail executives Jamie Dooley and Christine Scott spent $3.7 million in 2020 to demolish a seaside home near Destin, Florida.
Although the couple spent five years building a modern home on the cleared site, they listed the resulting new structure with a demolition condition, citing the fact that no one wanted to buy the property as it stood.
William Paddock, an employee at the environmental consultancy WAP Sustainability, pointed to the environmental damage caused by this construction cycle.
Paddock emphasized that tearing down a home of roughly 1,000 square metres and replacing it with a new building of approximately 2,700 square metres generates a carbon footprint equivalent to the annual emissions of an average 250 American households.
America
US inflation reaches 3.7% as midterm election campaign intensifies
An uptick in September inflation as the US midterm elections approach has pushed the cost-of-living debate back to the centre of the agenda for Democrats seeking to regain control of Congress from Republicans.
Annual inflation stood at 3.7% in September, according to the Consumer Price Index published by the Bureau of Labour Statistics, with energy, petrol, and electricity costs rising on a monthly basis.
Food prices remained flat from August to September, recording a 2.5% increase compared with the same period last year.
Democrats are anchoring their election campaigns to pledges of easing the cost of living, blaming the price increases on President Donald Trump’s tariffs and the war with Iran.
Trump and Republicans, pointing to the numerous left-wing candidates who won primary elections this year, contend that the opposition has become captive to “communists” within the party.
When annual inflation stood at 2.4% in February, the US and Israel launched the Iran war on the final day of that month, and prices continued to climb throughout the conflict.
The recent acceleration has not entirely reversed the retreat from the 40-year peak of 9.1% recorded in June 2022; however, the rate has remained above the Federal Reserve’s 2% target for over five years.
Fed policymakers raised the benchmark interest rate by a quarter of a percentage point last month, citing the battle against stubborn inflation. Officials will convene again next week to consider whether to raise rates or hold them within the 3.75% to 4% target range.
Energy and fuel record sharpest increase since first month of war
In September, energy prices posted their largest monthly jump since March, the first full month of the war with Iran, climbing 20.4% year-on-year. Energy costs had risen 2.1% from July to August, after falling 1.5% from June to July and 5.7% from May to June.
Recent escalations in Iranian attacks on oil tankers in the Strait of Hormuz, alongside more frequent strikes by Ukrainian forces against Russian refineries, have strained global crude oil and refined product markets, driving up US petrol and diesel prices.
Petrol prices also recorded their sharpest monthly increase since the first month of the war, climbing 9.1% from August to September, bringing the annual increase to 35.3%.
American Automobile Association (AAA) data shows the average price of regular petrol across the US stands at $4.26 per gallon; while below the level of roughly $4.48 recorded a month ago, it remains more than $1.20 higher than a year earlier. Average gallon prices exceed $6 in California and $5 in both Washington state and Nevada.
Electricity prices rose 0.2% from August to September, offsetting the 0.2% decline between July and August, and were up 4.4% year-on-year.
Heavy power demand from new data centres is feeding through into local household electricity bills. Trump argued that companies must cover the cost of the electricity required by their data centres themselves.
In a post on Truth Social, Trump claimed that he was requiring large data centres to generate their own power and feed the surplus back into the local grid, suggesting this could bring about “a major drop” in electricity prices.
Used vehicle market posts monthly rise as food costs stabilise
The cost of food at home fell 0.1% month-on-month in September, while dining out increased 0.2%.
Egg prices dropped to $2.27 a dozen, falling roughly 35% compared with September 2025 and remaining well below the 20-year peak of $6.23 recorded in March 2025.
Ground beef prices rose roughly 2.4% compared with September 2025, but at $6.48 a pound, they remained below the 20-year high of $6.98 reached in June.
Chicken held steady at its year-earlier level of $2.06 per pound last month, having fluctuated between $2.01 and $2.09 since November 2024.
Used car and truck prices fell 1.5% compared with September 2025, but rose 0.7% month-on-month in September following 0.4% increases in both July and August.
Heather Long, chief economist at Navy Federal Credit Union, noted that the sector faces severe pressure stemming from a combination of expensive replacement parts and a shortage of skilled labour.
Speaking to The Hill, Long emphasised that every cost pressure across the market is being felt directly at local auto repair shops.
America
Anthropic posts $80.7bn loss ahead of IPO as computing costs soar
Anthropic, developer of the artificial intelligence model Claude, reported a net loss of $80.7 billion for the first six months of 2026 ending 30 June.
According to a report by The Wall Street Journal citing the company’s draft initial public offering prospectus, this recorded loss nearly doubled the $42 billion loss incurred across the entirety of 2025.
The vast majority of that enormous figure, accounting for $72 billion, stemmed from accounting-driven book-value write-downs.
In contrast, the company saw a sharp surge in revenue, with turnover in the first half of the year climbing to $16.3 billion from $1.1 billion in the same period of the prior year.
During this period, Anthropic spent approximately $9 billion on computing power and infrastructure needs, surpassing in just six months the $7.3 billion spent across the whole of 2025.
The company has commitments to pay roughly $450 billion over the next seven to 10 years under cloud service contracts.
Under these obligations, contracts are planned for $111 billion with Google Cloud, $110 billion with Amazon Web Services, and $31 billion with Microsoft.
Anthropic will also spend up to $86 billion by 2033 and 2034, respectively, to lease Nvidia chips through smaller AI-focused cloud providers Nscale and Lambda.
The company could spend an additional $750 billion in the coming years to expand its computing capacity.
Roughly a third of the draft IPO prospectus was dedicated directly to risk factors.
The document highlighted the possibility that models could cause tangible real-world harm, noting that artificial intelligence could exhibit a “self-preservation” tendency and produce responses resembling “blackmail”.
Anthropic warned that the scale of damage caused by an AI-driven “catastrophic event” could render insuring against such risks impossible.
According to market expectations, Anthropic’s IPO could rank among the largest transactions in history, potentially surpassing SpaceX’s record.
Following the market debut, the company’s market valuation is projected to reach up to $2 trillion.
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