An economy that was already shrinking is starting to contract, raising the question of how far the federal budget cuts could hit the nation’s fragile recovery.
In a sign that the Federal Reserve is trying to keep pace with the slowdown in the economy, the U.K. and Japan were among the first to announce budget cuts Wednesday.
The U, a country of nearly a billion people, and the U., a country with nearly 2.5 billion people have announced their plans to reduce spending.
The Federal Reserve and the International Monetary Fund are considering other steps as well, but the cuts are likely to hit the U’s economy hardest.
The U.N. has also weighed in, warning that if the U is unable to cut spending and growth, the global economy could collapse.
Economists say the U economy is likely to shrink 1.5 percent this year and 2.3 percent in 2019.
Some economists believe that cuts in the budget could even reduce the Us economic growth, which is already declining as a share of gross domestic product, the official measures.
Ahead of the U-K.
announcement, the Fed announced it will cut its key interest rate by 0.75 percentage points from its March 7 rate to 1.25 percent, in an effort to push up inflation.
Bond yields on the U are rising because of the Fed’s move.
It was the first major economic policy announcement by the central bank since it last cut rates in March.
The Fed is also considering cutting interest rates on the government’s $85 billion in reserves.
The central bank is also working on a plan to buy more debt and other assets, including gold and the government-run mortgage-backed securities.
While the U and Japan announced their cuts, other countries, including Australia and Japan, also cut spending.
Australia’s spending on public services fell 5.5 per cent in the first quarter, according to the Australian Bureau of Statistics.
Meanwhile, Japanese consumer spending grew 5.6 per cent last year, compared with a 0.4 per cent increase in the U, according a survey by the Japan Federation of Trade Unions.
Japan is the world’s second-largest economy, with an annual gross domestic income of about $2.7 trillion, and its unemployment rate was 3.5 percentage points lower in the second quarter than in the same period last year.
There is some debate about whether the U will recover from its recession, especially as it faces a federal budget crisis.
Many economists believe the recovery in the auto industry, which has seen record sales and rising wages, will be short-lived.
That is why auto sales fell by more than a third last year and could drop by even more this year.
The automakers are hoping for a stronger economic rebound in China.
Still, the decline in manufacturing is a concern for many economists, as it could reduce demand for consumer goods and drive up prices for those goods.
If China’s economy remains weak, a weaker U.s. recovery may be a better bet for a rebound in the Chinese economy.
Despite the economic slowdown, the Federal Open Market Committee (FOMC) held its first meeting since the financial crisis and kept interest rates at 0.5% until March 17.
This is the first time the FOMC has met in the months since the government announced its stimulus package, which reduced the nations borrowing costs by $2 trillion.
“There are a lot of reasons why the recovery is not strong, and I think the economy is starting, for the most part, to pick up,” said Stephen Williamson, chief economist at Bank of America Merrill Lynch.
On Wednesday, the Fomc held its second meeting in a week, the first since March 10.
FOMs policymaking sessions are normally open to the public, but those sessions were closed to reporters because of a budget standoff.
Analysts expect that, as the Fed cuts its key rate to 0.25%, it will lower its target for the unemployment rate to 5.2 percentage points, from its current 5.3 percentage points.
As the Fed continues to cut interest rates, it may also cut its benchmark interest rate.
If it does, the rate could drop below zero, a level that would not require the Federal government to raise taxes or borrow more.
Since the recession, the central banks benchmark interest rates have been near zero.
That means that, even with the budget cuts, the economy may be growing at a pace much faster than expected.
And if the Fed moves further to the right, it could be pushing up inflation further.
U.S.-Japan growth slowed to a near-five-year low in the third quarter, but economists said that trend may turn around next year.
Inflation, meanwhile, rose at a faster pace in the fourth quarter than expected, to 0% in the June quarter.