IMF says US faces hard balancing act
Excessive tightening by the Fed could cause negative spillovers for global economy, fund warns
The International Monetary Fund warned the Federal Reserve has a difficult balancing act ahead to avoid a recession.
“An overly forceful policy response runs the risk of triggering an abrupt tightening in financial conditions and a US recession, creating negative spillovers to the global economy,” said the IMF. Alan Blinder, a former Fed vice-chair, tells Central Banking he expects it to raise rates to their neutral level before deciding on further tightening.
The IMF cut its previous GDP
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