WASHINGTON (Reuters) – The International Monetary Fund said on Friday that the Federal Reserve could start cutting interest rates later this year, even as a drop in U.S. consumer prices in June had raised hopes for an early rate cut. He expressed the view that we should continue to be cautious. Interest rate cut.
IMF spokeswoman Julie Kozak told reporters at a regular briefing that the process of deflating inflation is underway in the United States. Kozak spoke after the release of a report showing the U.S. Consumer Price Index fell 0.1% in June, the first monthly decline in four years.
“We certainly support the Fed’s data-driven and prudent approach to monetary policy, and we continue to maintain that assessment as we expect the Fed to be in a position to cut rates later this year,” Kozak said. ” he said.
Kozak also said that U.S. growth is “remarkably strong” and that significant federal spending on COVID-19 relief and investments in infrastructure, clean energy and semiconductors will have a lasting positive impact on the U.S. economy. He pointed out that he would give.
But Kozak reiterated the IMF’s recent annual policy recommendations to rein in the country’s growing debt mountain, a long-standing recommendation for the United States.
“The current fiscal deficit is too high, and now is the time to take action to decisively reduce the debt-to-GDP ratio downwards, especially given the strength of the economy. This will require extensive fiscal action. ” Kozak said.
The IMF currently estimates that net interest payments on the U.S. federal debt are expected to reach 3.2% of gross domestic product in fiscal year 2024, ending September 30, from 2.4% in fiscal year 2023 due to higher interest rates. are. Kozak added that this ratio will “remain high in the medium term” due to increasing deficits and debt levels.
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Report by David Lawder. Editing: Will Dunham
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