WASHINGTON (AP) — Top International Monetary Fund officials continue to sound warnings about the perils of a U.S. debt default.
IMF financial counselor Jose Vinals (veen-YAHLZ') says he sees the risk of a default as very low, but if Congress does fail to raise the federal borrowing limit and the U.S. defaults, there would be a "worldwide shock" that would threaten the global economic recovery.
Vinals offered the assessment as the IMF released its Global Financial Stability Report in Washington.
The report also says that the Federal Reserve's expected tapering of its economic stimulus program could pose a challenge to global financial stability as both interest rates and market volatility rise.
The Federal Reserve is expected to begin scaling back its $85-billion-a-month in bond purchases early next year. The purchases aim to promote growth by keeping interest rates low and injecting cash into the economy.
The easing would be a vote of confidence that the economy is strong enough to stand without extraordinary stimulus.
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