IMF Says Fed Should Hold Rates Steady

The IMF, International Monetary Fund, released out with a report today that says that the Fed's recent rate cuts have set the stage for an economic recovery and that "a risk-management approach would suggest that policy should be on hold."

The report further predicts that inflation will remain in control even as prices go up in the short term. The IMF expects inflation to rise to 4% in 2008 before falling back to 2% in 2009.

John Lipsky, first deputy managing director at the IMF, said that he believes the Fed will need a "vigorous response" to inflation once the recovery has taken hold.

 

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

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Comments

  • Rob

    June 24, 2008

    The Fed shouldn't be responding to the IMF. They have two mandates. First, to stimulate the economy and, second, to fight inflation. They have taken action against the first, and now it is high time to turn around and deal with the second.

  • Sol Nasisi

    June 25, 2008

    The Fed isn't responding to the IMF. It's just their opinion. Take it or leave it.

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