IMF Anticipates 'Persistent Inflation Problem' For US, Interest Rates To Stay At 5.5% Until 2024
Portfolio Pulse from Piero Cingari
The International Monetary Fund (IMF) warns of persistent inflation in the US if the job market does not soften and monetary policy remains tight. The IMF expects the federal funds rate to stay in the 5.25%-5.5% range until late 2024. The Fund also highlights systemic risks related to the federal debt ceiling and advises Congress to raise or suspend it.
May 26, 2023 | 8:21 pm
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NEGATIVE IMPACT
The IMF's warning of persistent inflation and advice to maintain the federal funds rate at 5.25%-5.5% until late 2024 may impact the iShares U.S. Treasury Bond ETF (GOVT).
The IMF's warning of persistent inflation and advice to maintain the federal funds rate at 5.25%-5.5% until late 2024 may lead to higher interest rates, which could negatively impact bond prices, including the iShares U.S. Treasury Bond ETF (GOVT). Additionally, the IMF's concerns about the federal debt ceiling may create uncertainty in the bond market, further affecting GOVT.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80