IMF Forecasts Slower US Growth, Higher-for-Longer Global Interest Rates

The International Monetary Fund (IMF) forecast a diminution successful U.S. maturation adjacent year, besides informing that liking rates whitethorn enactment higher for longer arsenic inflation remains stubbornly high.

The IMF successful its latest outlook for nan world system predicted U.S. economical maturation of 2.6% for 2024 and 1.9% adjacent twelvemonth arsenic “the labour marketplace cools and depletion moderates.”

The group kept its forecast for world economical maturation unchanged astatine 3.2% successful 2024 and projected 3.3% maturation adjacent year, up from 3.2% previously.

Sticky Inflation Portends Higher-for-Longer Rates, IMF Says

Inflation is sticky, supported by lofty services prices and wages, arsenic good and geopolitical waste and acquisition stresses, nan IMF said, portending higher-for-longer liking rates.

“Services ostentation is holding up advancement connected disinflation, which is complicating monetary argumentation normalization,” nan IMF wrote. “Upside risks to ostentation person frankincense increased, raising nan imaginable of higher-for-even-longer liking rates, successful nan discourse of escalating waste and acquisition tensions and accrued argumentation uncertainty.”

Still, nan IMF said that falling power prices and a "gradual cooling of labour markets" should bring ostentation backmost to world cardinal banks' targets by nan extremity of 2025.

Federal Reserve Chairman Jerome Powell and his colleagues who group U.S. monetary policy have said they request assurance that value pressures are easing earlier they move to trim their influential liking rate.