Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that China's growth prospect lies somewhere between hard-landing and muddle-through scenarios. However, uncertainty remains and is already being felt strongly and likely to put increasing pressure on emerging markets through trade contraction and financial contagion. For the United States, fragility in emerging markets is the critical risk and will dominate economic decision-making for months if not years to come.

Bottom Line: The October U.S. budget agreement provides a short respite, with a new spending showdown likely in January. Although the debt limit extension may last until the summer, the costs of our …