IMF Evaluated FED's Interest Policy
IMF evaluated the Fed's interest rate policy. The IMF said that a rate hike may be required by the end of 2022 or in 2023.
According to the International
Monetary Fund (IMF), government spending in the US will cause inflation to be shaped on long-term targets and the FED (US Federal Reserve) will need to increase interest rates by the end of 2022 or the beginning of 2023.
Stating that the US will begin to reduce its asset purchase program in the first half of 2022, IMF officials said, "Making this transition will require excellent communication in a tight time."
At the meeting held on June 15-16, the FED noted that it would keep interest rates constant until next year to support the US economy. While FED officials predict two rate hikes in 2023, 7 out of 18 policy makers want to increase rates in 2022.
Fed Chairman Jerome Powell stated that the rise in inflation was due to supply problems and would most likely be temporary.
Atlanta Fed Chairman Raphael Bostic stated that he expects the
FED to increase interest rates until the end of 2022 as a result of the faster-than-expected recovery, while Dallas Fed Chairman Robert Kaplan underlined that the Fed may reach the threshold of reducing asset purchases earlier than people think.