New inflation warning: Get used to high interest rates, IMF says
The IMF warns of persistent inflation leading to higher global interest rates due to high service prices and trade tensions. Central banks are cautious about rate cuts, emphasizing sustainable inflation levels. Major central banks may reduce borrowing costs later in the year, anticipating a global inflation slowdown. Tariffs, sticky services price inflation, and trade tensions pose risks to economic growth. IMF downgrades US growth forecasts but revises India and China upwards, highlighting Asia's role in global growth.
Read original article
The International Monetary Fund (IMF) issued a warning about persistent inflation leading to higher interest rates globally. Factors such as high prices for services and escalating trade tensions are contributing to this scenario. Central banks are cautious about cutting interest rates, with the Federal Reserve and Bank of England emphasizing the need for sustainable inflation levels before rate adjustments. The IMF anticipates major central banks to reduce borrowing costs later in the year, with a forecasted global inflation slowdown. However, sticky services price inflation and rising trade tensions pose risks to economic growth. The IMF also highlighted concerns about tariffs impacting living standards and global economic coordination. Despite a projected global economic expansion, the IMF downgraded growth forecasts for the US while revising upward forecasts for India and China, emphasizing Asia's role as a key engine for global growth.
Related
Inflation's Wild Ride
Inflation fluctuated significantly since the pandemic, starting with low rates in 2019, a surge in 2021 due to Biden's stimulus, peaking at 9.1% in 2022, and showing signs of cooling in mid-2023. Policymakers are monitoring for further changes.
Are We Already in Recession?
The economy might be in a hidden recession despite official indicators showing otherwise. Issues like underestimated inflation and stagnant manufacturing orders suggest a potential long-term downturn, urging alternative indicators for accurate assessment.
Navigating The Fed's Expected Rate Cuts
The Federal Reserve influences the economy through the federal funds rate, currently at 5.25%–5.5%. Expected rate cuts may impact borrowing, consumer spending, business growth, employment, wages, and investor returns.
A key part of America's economy has shifted into reverse
CNN Business analysis reveals US economy weakness: high unemployment, slowed consumer demand, declining service sector activity. Factors include inflation, interest rates, and debt burden. Hiring slowdown in services industry raises concerns about economic stability.
A key part of America's economy has shifted into reverse
The US economy faces challenges with weakening sectors, including high unemployment rates and reduced consumer demand impacting service businesses like restaurants and dental clinics. Factors include inflation, interest rates, and debt burdens.
1 commentsRelated
Inflation's Wild Ride
Inflation fluctuated significantly since the pandemic, starting with low rates in 2019, a surge in 2021 due to Biden's stimulus, peaking at 9.1% in 2022, and showing signs of cooling in mid-2023. Policymakers are monitoring for further changes.
Are We Already in Recession?
The economy might be in a hidden recession despite official indicators showing otherwise. Issues like underestimated inflation and stagnant manufacturing orders suggest a potential long-term downturn, urging alternative indicators for accurate assessment.
Navigating The Fed's Expected Rate Cuts
The Federal Reserve influences the economy through the federal funds rate, currently at 5.25%–5.5%. Expected rate cuts may impact borrowing, consumer spending, business growth, employment, wages, and investor returns.
A key part of America's economy has shifted into reverse
CNN Business analysis reveals US economy weakness: high unemployment, slowed consumer demand, declining service sector activity. Factors include inflation, interest rates, and debt burden. Hiring slowdown in services industry raises concerns about economic stability.
A key part of America's economy has shifted into reverse
The US economy faces challenges with weakening sectors, including high unemployment rates and reduced consumer demand impacting service businesses like restaurants and dental clinics. Factors include inflation, interest rates, and debt burdens.