The International Monetary Fund said on Friday U.S. interest rates will likely need to remain higher for longer to tame inflation, and Washington needs to tighten fiscal policy to bring down its federal debt.
The IMF said in a statement issued after its “Article IV” review of U.S. policies that the U.S. economy has proved resilient in the face of tighter monetary and fiscal policy, but this means that inflation has been more persistent than anticipated.
The fund’s review included a U.S. full-year growth forecast of 1.7% for 2023, slightly above its 1.6% estimate in April, and lower output of 1.2% on a fourth-quarter comparison basis.
Read More : IMF Urges US to Adopt Stricter Fiscal Measures to Combat Ongoing Inflation