By Alessandro Albano
Investing.com – The Federal Reserve may not wait until the end of 2023 to intervene on interest rates, tightening monetary stimulus as early as the first half of next year.
This is what we read in the latest assessment of the International Monetary Fund on the US economy published on Thursday, according to which the Marriner S. Eccles Building could begin to turn off the QE tap already “in the first half of 2022”, with the first increases post-pandemic rates that could come “at the end of 2022 or early 2023”.
In the assessment of the IMF, it is emphasized that the measures could be continued “only if the basic projections and the assumptions of fiscal policy are realized by that date”. According to the new projections, the Fund expects US real GDP to grow by 7% in 2021, “the fastest pace in a generation”, followed by an expansion of 4.9%, + 1.9% and + 1.7% in 2022, 2023 and 2024 respectively.
Looking at consumer prices, the world institution sees an inflation rate of 4.3% for 2021 and 2.4% for both 2022 and 2023. The average unemployment rate should then reach 4.4% in 2021, 3.1% in 2022 and 3% in 2023.
On the fiscal side, the maxi spending plan proposed by President Joe Biden, which is articulated through the American Jobs Plan focused on infrastructure and the American Families Plan based on social spending, could increase GDP growth by a cumulative value of about 5 , 25% from 2022 to 2024.
According to FXStreet, “given the greater likelihood of Fed monetary policy adjustments, the latest IMF comments may help the US dollar by weighing on commodity prices.”
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.