The US economy remains engulfed by the subprime crisis, as major banks grapple with the billions of dollars of bad mortgage debt on their books.
Last Friday, the US witnessed the second largest bank failure in its history, when the IndyMac Bank collapsed and was taken over by federal regulators.
That was followed over the weekend by the government stepping in to rescue Fannie Mae and Freddie Mac, the country’s two largest mortgage finance providers.
Coupled with those problems, figures released yesterday showed US inflation continues to increase, mainly because of the soaring costs of fuel and food.
The effects of the economic deterioration can be seen in the fortunes of the biggest US companies, ranging from General Motors, which announced plans yesterday to lay off workers and slash costs, to Starbucks, the giant coffee chain which is due to close 600 of its outlets.
“The bottom line is this: we’re going through a tough time,” US President George W Bush said at a press conference in the White House yesterday.
Like other countries, Ireland is feeling the impact of the US downturn, and it is against that backdrop that Mr Cowen is visiting New York.
Mr Cowen is in the city to meet with senior political and business figures, and the current economic difficulties are likely to dominate the meetings.
“The discussions are expected to focus on the current situation in the US and global economies and how Ireland can maintain its economic success during this difficult period internationally,” a Government spokesman said.
Mr Cowen’s engagements this morning will begin with a breakfast at the stock exchange organised by Enterprise Ireland, the State agency which helps Irish businesses develop in overseas markets.
At 9.30am local time he will ring the opening bell. After the stock exchange, Mr Cowen will travel to City Hall to meet with New York mayor Michael Bloomberg.
He will visit the World Trade Tribute Centre this afternoon to pay tribute to those killed in the terrorist attacks of 9/11.
Mr Cowen is in New York until Friday morning, and will attend a number of other meetings and events between now and then.
He commenced his visit last night by opening a photographic exhibition by Cork-based portrait photographer John Minihan at the Irish Arts Centre on West 51st Street.