IMF suggests US interest rates needs to be higher for longer

Kristalina Georgieva, Managing Director of the International Monetary Fund, has crossed the wires with the following comments:

US economy has proven resilient in face of significan fiscal and monetary tightening -article iv review statement.

Expects US growth to be around 1.2% in 2023, picking up momentum later in 2024.

US unemployment to rise slowly to close to 4.5% by end-2024.

Strength in US demand and labor market means a persisten inflation problem.

Core US inflation will continue to fall during 2023, but remain ‘materially above’ 2% fed target throughout 2023 and 2024.

Will be essential for fed to communicate carefully on policy path.

US interest rates will need to be higher for longer.

US needs to do more to lower the public debt.

We are very keen to see a u.s. debt ceiling resolution as soon as possible.