The financial leaders of the G7 nations meet in Japan's Niigata beginning Thursday as a standoff over the U.S. debt ceiling and potential default looms as one of the biggest potential threats to the global economy, along with the crisis in Ukraine.
The Federal Reserve said in a report this week that U.S. banks raised their lending standards for business and consumer loans in the aftermath of three large bank failures that were in part brought on by the central bank’s sharp increases in interest rates to beat down inflation that surged to four-decade highs after the pandemic.
Other G7 economies are contending with higher surging prices, obliging their central banks to raise interest rates that went to record lows in the early days of the pandemic.
The G7 finance ministers and central bank governors event, which runs through Saturday, is part of a series of high-powered meetings leading up to the G7 leaders’ summit next week.
The G7 consists of the U.S., Canada, France, Germany, Italy, Japan and the UK. Other invitees to the meetings in Niigata include the European Union, IMF and World Bank, and the finance ministers of Brazil, Comoros, India, Indonesia, South Korea and Singapore.
