5 Jun 2015
US growth forecasts slashed to 2.5% for 2015 - IMF
FXStreet (Mumbai) - The International Monetary Fund (IMF) on Thursday slashed its forecasts for US economic growth and called for the Federal Reserve to hold off its first rate increase in nearly a decade until 2016.
In its annual review of the world's largest economy, the IMF downgraded its growth expectations to 2.5% of GDP for this year. That's a considerable cut in expectations given the 3.1% expansion seen in its last estimate in April.
The IMF noted in its report, "The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,"
"Inflation inertia, firmly anchored expectations, Fed credibility and a relatively flat relationship between inflation and slack suggest that a sudden acceleration in wages or prices is unlikely."
In its annual review of the world's largest economy, the IMF downgraded its growth expectations to 2.5% of GDP for this year. That's a considerable cut in expectations given the 3.1% expansion seen in its last estimate in April.
The IMF noted in its report, "The FOMC should remain data dependent and defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,"
"Inflation inertia, firmly anchored expectations, Fed credibility and a relatively flat relationship between inflation and slack suggest that a sudden acceleration in wages or prices is unlikely."