However, if the correction in the housing market intensifies or the negative effects of disruptions in financial markets become unexpectedly widespread, private consumption and business fixed investment may fall below expectations through negative wealth effects, credit tightening, and deterioration in business and consumer sentiment, thereby leading to further deceleration in U.S. economic growth.
But now, the nature of the many challenges we face shows how right this approach fundamentally was: think of migrants seeking refuge in our countries, the threat of terrorism, the consequences of climate change, the recent succession of financial and economic crises. And these challenges are not specific to Europe. They are global.