IMF warns Fed over persistent inflation

IMF spokesperson Julie Kozack expressed support for Fed Chair Kevin Warsh's remarks on combating inflation, highlighting the importance of taking further policy action when necessary. Following the Fed's decision to keep its benchmark interest rate unchanged at 3.75%–4.00%, the IMF stressed that monetary policy decisions should remain data-dependent amid heightened economic uncertainty.

The U.S. economy's fastest quarterly growth in a year, combined with persistent inflationary pressures, has strengthened expectations that the Fed could raise interest rates in December. Kozack noted that consumer spending and investment continue to support economic growth despite elevated oil prices, while hourly productivity in the United States increased by 2.5% year over year. The IMF highlighted that productivity gains have been particularly concentrated in the technology sector and emphasized the need for these improvements to spread more broadly across the economy.