(Bloomberg) -- Brazilian Finance Minister Fernando Haddad said he anticipates the Federal Reserve’s delay in lowering interest rates will trigger a repricing across global markets, while the nation’s central bank chief expressed confidence in Brazil’s external accounts.

International Monetary Fund Managing Director Kristalina Georgieva said the dollar’s strength has prompted concerns among a number of economies, with all eyes on the US and when the Federal Reserve will be able to lower interest rates. US economic strength was a major factor in the IMF upgrading its global economic growth outlook slightly for 2024, Georgieva said Thursday in an interview with Bloomberg Television.

The IMF and World Bank are this week hosting spring meetings of finance and central bank chiefs from around the world. Among the other key subjects are discussions about advancing debt relief for distressed nations and — among Western powers — talks on the scope to step up efforts to aid Ukraine and punish Russia for its invasion of that country.

One element of tension emerging from the gatherings has been differences between the US and European Union members over deploying frozen Russian reserves to help Ukraine.

(All times Washington, DC, GMT -4)

Brazil Sees Global Market Repricing on Fed’s Stance (1:38 p.m.)

Brazilian Finance Minister Fernando Haddad said he anticipates the Federal Reserve’s delay in lowering interest rates will trigger a repricing across global markets.

Haddad spoke in a press conference in Washington before heading out Thursday night for an earlier-than-expected return to Brazil. The nation’s congress is now debating a tax-reform package that Haddad has championed.

At the same event, Brazilian central bank chief Roberto Campos Neto said that the effects from a global repricing in interest-rate expectations are not yet known. But he said that his nation’s external accounts are very strong, helping differentiate its position relative to some others. Markets are very sensitive to US monetary policy, he added.

Campos Neto also said Brazil only intervenes in the foreign exchange market to correct malfunctions. -Beatriz Reis and Martha Beck

Australia Still Expects Budget Surplus But Difficulties Rising (1:11 p.m.)

A second straight budget surplus in Australia is becoming more difficult but the government is still aiming to announce it later this month, Australian Treasurer Jim Chalmers said in Washington. 

“The degree of difficulty on that second surplus has come up a little bit,” Chalmers said Thursday in an interview with Bloomberg Television. “That’s certainly our goal - we’re not quite there yet,” he said, adding that the Australian economy is slowing, the labor market is softening and there is rising global economic uncertainty. -James Mayger

BOE Interest-Rate Cutes Are Not Imminent, Policymaker Greene Says (11:40 a.m.)

Bank of England policymaker Megan Greene said the UK faces difficult trade-offs over whether to cut interest rates because underlying inflation remains high and growth is weak.

Greene said rate cuts were not imminent, though the combination of high inflation and weak growth means “we are sort of in trade-off territory.”

“We have to weigh the risk of doing too much against the risk of doing too little,” Greene said Thursday at the event. “Unlike in the US where growth is really strong, it’s not in the UK.”

“In my mind, doing too little is the bigger risk because you end up having to hike rates even higher in the end and could end up generating an even bigger recession,” she said. “That would be the worst scenario.” -Philip Aldrick and Tom Rees

Goldman President Sounds Alarm on UK ’22-Like Jolt to US Markets

Goldman Sachs Group Inc. President John Waldron warned that out-of-control spending could expose the US to serious risk in the event of a political crisis.

“The thing that I worry about is the confluence of a political crisis and a lot of leverage in the Treasury system,” Waldron said at an event organized by Semafor. “The more leverage we have, the riskier we make it. So I wish Washington would get its spending under control.”

Waldron drew comparisons with the turmoil that rocked the UK in 2022. Pension funds had used a strategy known as liability-driven investment, or LDI, for protection from falling government bond yields. That move backfired when the government of Prime Minister Liz Truss announced unfunded tax cuts — sending yields soaring, and exposing a major risk at the heart of the UK financial system.

“Think about the LDI situation that happened in the UK — that was really precipitated by a political crisis,” Waldron said. A version of that turmoil could emerge in the US if there’s a political crisis, Waldron said. “So I think we should worry about that,” he added. -Todd Gillespie

Germany Warns Using Russian Assets Threatens Financial Stability (10:11 a.m.)

Germany’s Finance Minister Christian Lindner warned that using frozen Russian assets to aid Ukraine could jeopardize international financial stability and sovereign immunity.

“If third parties have the impression that their sovereign assets are not safe under certain circumstances, international financial stability could be jeopardized,” Lindner said. “We would lose more than we would gain in the long run.”

A second concern is the violation of the principle of sovereign immunity, which must be maintained under all circumstances, Lindner said.

Lindner referred to a proposal from US Treasury Secretary Janet Yellen in Group of Seven talks to leverage the Russian assets, which were frozen after Russia’s attack on Ukraine, by setting up a fund and financing it with the proceeds. About $280 billion in Russian assets have been frozen, with more than two thirds blocked in the EU.

“We have no details of such a proposal at the moment, so we are not in a position to assess it in detail in terms of risk profile or volume,” said the German finance minister. However, Lindner added, Germany is open to examining further proposals. -Kamil Kowalcze and Alexander Weber

Georgieva Still Optimistic Fed to Be Able to Cut Rates in 2024 (9:20 a.m.)

“The Fed is doing the right thing” by standing pat with its monetary stance for now, Georgieva said in an interview Thursday with Bloomberg Television. “The Fed is not yet prepared, and rightly so, to cut.”

A key question at the meetings in Washington has been “how long will the Fed be stuck with higher interest rates,” she said. “That’s what I hear from countries.”

“All eyes are on the US,” she said. With regard to the strength in the dollar, she said that “of course it is concerning.” So far, “the business environment in the United States has not reacted very firmly to the interest rates being high — but we see a little softening underneath.” The economy is “slightly overheated” in part because of the US fiscal stance, she said.

Georgieva said that “we still remain optimistic that, within this year, conditions in the United States would allow the Fed to start cutting.” -Jonathan Ferro and Christopher Condon

ECB’s Knot Plays Down Oil Price Risk to European Inflation (9:02 a.m.

A jump in energy prices would pose a less acute danger to inflation in Europe than the gyrations in commodities markets seen in recent years, according to European Central Bank Governing Council member Klaas Knot.

Describing current risks to consumer prices as “becoming more balanced,” the Dutch official told Bloomberg Television’s Lisa Abramowicz and Annmarie Hordern that inflation is subsiding toward 2% across the 20-nation euro area.

“Now, if we have an oil shock, it will be against a backdrop of general disinflation in all other factors,” he said Thursday in Washington. “The likelihood of significant second-round effects, I would argue, is smaller but it is clearly something to monitor.” -Mark Schroers and Alexander Weber

IMF’S Georgieva Urges Fiscal Tightening to Prep for Next Shock (8:41 a.m.)

Georgieva called on major economies to tighten their fiscal policies after a mass ramp-up of debt in recent years to cope with the pandemic crisis.

“Countries must urgently build fiscal resilience for the next shock” in a world where crises keep on coming, Georgieva said in a press conference Thursday in Washington. It’s important to be “rebuilding fiscal buffers.”

Central banks fighting inflation also “can use some help from the fiscal side,” she said. -Eric Martin and Philip Aldrick

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