IMF supports start of US interest rate cuts

The International Monetary Fund said it is appropriate for the US Federal Reserve to start a “long-awaited” monetary easing cycle at its meeting next week, as risks of rising inflation recede.

Julie Kozack, a spokeswoman for the International Monetary Fund, explained in a press conference that the fund expects the US economy to slow for the rest of the year, and that this will be reflected in its updated forecasts for the global economic outlook next October.

She added that the IMF expects the core personal consumption expenditure index in the United States to end 2024 at 2.5 percent and return to the US central bank’s target of 2 percent by mid-2025.

She continued: “This means that we see an imminent start to an easing cycle, as reported by the Federal Reserve. However, the upside risks to inflation, although declining, have not completely disappeared,” noting that the Federal Reserve will have to continue to measure the pace and extent of interest rate cuts in light of future economic data. It is noteworthy that economic indicators in the United States of America have strengthened expectations that the Federal Reserve, the central bank, will avoid cutting interest rates significantly next week.