The financial market turmoil has impacted private equity and debt markets where spreads have risen. The problems of subprime mortgages market are now well acknowledged to drag the housing sector of U.S and its growth.
Additional risks which cloud global economic prospects are rise in inflationary pressures given volatile oil markets and rise in commodity prices going beyond precious and industrial metals to foods such as wheat, soybean oil and palm oil that have reached record highs during 2007. Weakening dollar has further amplified the oil price surge.