IMF Hails Federal Reserve, Bank of Japan Measures

IMF Director of communications Julie Kozak said on Thursday that the International Monetary Fund believes that the Federal Reserve's rate cut on Wednesday and adopting more cautious forecasts is appropriate given the rising economic uncertainty in the United States.

“Data from the past few months show that the labor market continues to slow down, coinciding with inflation somewhat higher than expected, but it is still falling towards the target,” Kozak said at a press conference, adding, “Therefore, we believe that the action taken by the Federal Reserve Bank is appropriate.”

Kozak explained that the process of reducing inflation in the United States proved to be less expensive than many feared in terms of jobs, and the International Monetary Fund expects that core inflation of personal consumption expenditures, the Federal Reserve's preferred measure, will end in 2024 at just under 3%.

As for the Bank of Japan's decision, Kozak said that the IMF also believes that the Bank of Japan's steps are appropriate.

Earlier on Thursday, the Bank of Japan kept interest rates unchanged, but offered little evidence on how quickly borrowing costs would be raised, while waiting for U.S. President-elect Donald Trump's economic and tariff plans.

“We also recommend continuing the data-driven monetary policy in their quest to normalize the policy and ensure that inflation returns directly to the target,” Kozak said of the Bank of Japan.

Asked about Trump's plans for the US Strategic Reserve of Bitcoin, Kozak declined to comment, saying that the IMF would fully assess Trump's policies when implemented after taking office in January 2025.