IMF: US interest rates will need to be higher for longer

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Kristalina Georgieva, Managing Director of the International Monetary Fund, has crossed the wires with the following comments:

  • US economy has proven resilient in face of significan fiscal and monetary tightening -article iv review statement.
  • Expects US growth to be around 1.2% in 2023, picking up momentum later in 2024.
  • US unemployment to rise slowly to close to 4.5% by end-2024.
  • Strength in US demand and labor market means a persisten inflation problem.
  • Core US inflation will continue to fall during 2023, but remain ‘materially above’ 2% fed target throughout 2023 and 2024.
  • Will be essential for fed to communicate carefully on policy path.
  • US interest rates will need to be higher for longer.
  • US needs to do more to lower the public debt.
  • We are very keen to see a u.s. debt ceiling resolution as soon as possible