IMF asks US Federal Reserve to delay rate rise

IMF managing director Christine Lagarde said the Federal Reserve should wait to see “more tangible signs of wage or price inflation”.

The IMF believes that “pockets of vulnerability” in the US economy have emerged.

These could cause serious trouble for the wider economy, Ms Lagarde said.

She also said that a gradual rise in the US benchmark federal funds rate would be appropriate, while higher rates could cause market volatility.

Ms Lagarde added that the IMF recognised the work that the US had done.

In the IMF’s annual assessment of the US economy, she said rate decisions should be data dependent.

Many Washington watchers have predicted an interest rate rise this year.

But recent economic reports have been mixed, including data showing that the US economy shrank an annualised 0.7% in the first quarter.





 

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