Salient to Investors:

The OECD said:

  • Failure to prevent the fiscal cliff would increase the risk of a global recession.
  • The greatest threats to the world economy lie in the euro area, whose debt crisis urgently need fixing.
  • Reducing the large federal budget deficit is necessary to restore fiscal sustainability, but should be done gradually and in the context of a well-identified medium-term consolidation plan.
  • The Fed should stand ready to enlarge its third round of quantitative easing program if the U.S. economy deteriorates.
  • The U.S. labor market has recovered very slowly, and the unemployment rate will to decline to 7.5 percent at the end of 2014.
  • US GDP will grow 2.2 percent in 2012, 2 percent in 2013, and 2.8 percent in 2014. Euro area GDP will contract 0.4 percent in 2012 and 0.1 percent in 2013.

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