financetom
Economy
financetom
/
Economy
/
IMF says Fed taking appropriate action on rates given high US uncertainty
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
IMF says Fed taking appropriate action on rates given high US uncertainty
Dec 19, 2024 10:06 AM

WASHINGTON (Reuters) - The International Monetary Fund views Wednesday's Federal Reserve interest rate cut and adoption of a more cautious outlook as appropriate given high U.S. economic uncertainty, IMF spokesperson Julie Kozack said on Thursday.

"Data from the last few months shows that the labor market continues to cool at the same time that inflation has been somewhat higher than expected, but still trending down toward the target," Kozack told a news briefing. "So with this background, we see the Fed's action as appropriate."

Kozack said the U.S. disinflation process has proven less costly than many had feared in terms of jobs, the IMF expects core PCE inflation, the Fed's preferred measure, to end 2024 at just under 3% as it declines towards the Fed's 2% target.

Earlier on Thursday, the Bank of Japan kept interest rates unchanged but offered few clues on how soon it could push up borrowing costs as it waits for U.S. President-elect Trump's economic and tariff plans.

Kozack said that the IMF also views the BOJ's actions as appropriate.

"We also recommend that they continue a data-dependent monetary policy as they seek to both policy normalization and ensuring that inflation directly returns to target," Kozack said of the BOJ.

Asked about Trump's plans for a U.S. strategic bitcoin reserve, Kozack declined to comment, saying the IMF would fully assess Trump's policies as they are implemented after he takes office in January.

The IMF's $2.4 billion loan deal this week with El Salvador requires the country to scale back its official bitcoin activities. Kozack said the Fund sees both opportunities and risks to crypto assets, including risks to financial stability and integrity and consumer protection and countries should have policy frameworks to address such risks.

But she said the IMF recognizes that financial institutions are adopting underlying crypto asset technology for payment systems, security and back office operations.

"And it's also important to recognize that investor appetite for crypto assets has been very strong, reflecting the assessment by some that crypto assets can generate diversification benefits in asset allocation," she said.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Federal Reserve Watch for March 3: 'Patient' Approach to Monetary Policy Decisions Appropriate
Federal Reserve Watch for March 3: 'Patient' Approach to Monetary Policy Decisions Appropriate
Mar 3, 2025
02:40 PM EST, 03/03/2025 (MT Newswires) -- St. Louis Federal Reserve President Alberto Musalem (voter) said that a patient approach to monetary policy is appropriate given the level of inflation remains above the Federal Open Market Committee's 2% target and labor markets remain healthy. Musalem added that inflation expectations need to continue to be monitored to ensure that they remain...
US construction spending unexpectedly declines in January
US construction spending unexpectedly declines in January
Mar 3, 2025
WASHINGTON (Reuters) - U.S. construction spending unexpectedly fell in January, pulled down by a decline in outlays on multi-family homebuilding. The Commerce Department's Census Bureau said on Monday that construction spending dropped 0.2% after an unrevised 0.5% increase in December. Economists polled by Reuters had expected construction spending would be unchanged. Construction spending increased 3.3% on a year-on-year basis in...
Fed's Musalem expects continued economic growth, but sees risks in recent data
Fed's Musalem expects continued economic growth, but sees risks in recent data
Mar 3, 2025
WASHINGTON (Reuters) - St. Louis Federal Reserve President Alberto Musalem said on Monday he expects the U.S. economy to continue to expand this year, but recent weaker-than-expected consumption and housing data and reports from business contacts have raised concerns about possible risks to growth. The outlook for continued solid economic growth looks good, the labor market is healthy, and financial...
Tariffs Weigh On US Manufacturing: February Prices Grow At Fastest Pace Since 2022
Tariffs Weigh On US Manufacturing: February Prices Grow At Fastest Pace Since 2022
Mar 3, 2025
The U.S. manufacturing sector expanded for the second consecutive month in February 2025, following 26 months of contraction. However, the effects of newly imposed tariffs were felt throughout the industry.  The Details: According to the Institute for Supply Management, February's Manufacturing PMI fell to 50.3%, down from 50.9% in January, below market expectations of 50.5% as tracked by Trading Economics.  Overall...
Copyright 2023-2026 - www.financetom.com All Rights Reserved