IMF says US faces hard balancing act

IMF HQ 2
The IMF's second HQ building
Photo: Henrik Gschwindt de Gyor/IMF

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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