IMF Expects US Interest Rates to Continue to Rise to Tame Inflation

The International Monetary Fund (IMF) expects US interest rates to continue to rise for a longer period to tame inflation, pointing out that Washington needs to tighten fiscal policy to reduce its federal debt.

In a statement issued after reviewing "Article Four" of US policies, the Fund said that the US economy has proven resilient in the face of more tightening monetary and fiscal policy, but this means that inflation was more stable than expected.

The fund's revision included full-year growth forecasts for the United States at 1.7% for 2023, slightly above its forecast of 1.6% in April.

The Managing Director of the IMF, Kristalina Georgieva, said in a press conference that the US government needs to reduce the deficit, especially while increasing tax revenues.

Georgieva added that she hopes that a solution will be reached "within 12 hours" to the US debt ceiling crisis in Washington to avoid a catastrophic default that would add more shocks to the global economy.