Washington: The U.S. economy has seen solid growth momentum and inflation was expected to reach the Federal Reserve's 2% target by the end of 2027, the International Monetary Fund said on Thursday.IMF spokeswoman Julie Kozack told a regular news briefing that the Fed last week appropriately decided to hold its key policy interest rate, and welcomed the strong commitment of the new chair, Kevin Warsh, to delivering price stability."Growth momentum in the U.S. economy has been solid," Kozack told reporters, citing Thursday's data, which revised first-quarter GDP growth to a 2.1% annualized rate, up from a 1.6% rate reported previously.She noted that government consumption had bounced back, investment in the U.S. was strong, and labor productivity remained high, making the U.S. a bit of an outlier in the world.Inflation remained higher than the Fed's target, but was expected to ease, she said."Because of this dynamic, we think the Fed appropriately decided to keep the policy rate on hold. Any further policy actions by the Fed will need to proceed with caution and they would need to be carefully calibrated to the incoming data," she added.
'Growth momentum solid,' IMF says, backing Fed's wait-and-see approach
The U.S. economy is showing robust growth, with first-quarter GDP revised upwards to 2.1%. The International Monetary Fund anticipates inflation will hit the Federal Reserve's 2% target by late 2027. IMF spokesperson Julie Kozack praised the Fed's decision to hold interest rates, emphasizing the need for cautious, data-driven policy adjustments moving forward.
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