IMF Urges Fed Caution, Projects Return to 2% Inflation Only by End-2027
The International Monetary Fund said rising U.S. inflation pressures from higher tariffs and renewed energy costs mean the Federal Reserve should proceed cautiously on interest rates. The IMF now projects inflation will return to the Fed's 2% target only by the end of 2027, later than its previous mid-2027 forecast, while markets are starting to bet on possible rate hikes.
The IMF said the Iran war has curtailed about 14 million barrels a day of oil production, leaving global oil prices about 3% above the levels assumed in its April forecast for 3.1% global growth. It said the price outlook depends on reopening the Strait of Hormuz, and that global oil reserves are expected to fall to a five-year low of 7.5 billion barrels in July from 8 billion before the conflict.
From the sources (8 posts)
@deitaoneIMF FLAGS OIL PRICE RISK FROM IRAN WAR IMF says global oil prices are ~3% above levels used in its April 3.1% global growth baseline. It estimates Iran-related disruptions have curtailed ~14M barrels/day of production, with price outlook t
@deitaoneIMF WARNS U.S. INFLATION RISKS PUSH FED CAUTION IMF sees rising U.S. inflation pressures from higher tariffs and renewed energy costs feeding into headline inflation. It urges the Federal Reserve to proceed cautiously, citing persistent up
@financialjuiceIMF: Return to Fed's 2% inflation target is now projected at end-2027 vs previous forecast of mid-2027, markets starting to bet on rate hikes.
@financialjuiceIMF: Fed should proceed with caution on rate policy due to continued upside inflation risks.
@financialjuiceIMF: Global oil prices are currently about 3% higher than levels used in its baseline 3.1% global growth forecast in April
@financialjuiceIMF: Iran war has curtailed production of 14 mln BPD, prices will depend on Strait of Hormuz reopening
@financialjuiceIMF: Oil reserves are expected to reach a five-year low of 7.5 billion barrels in July vs 8 billion barrels before the Iran war started.
@firstsquawkIMF PREDICTS OIL RESERVES WILL FALL TO FIVE-YEAR LOW OF 7.5 BILLION BARRELS IN JULY, DOWN FROM 8 BILLION BARRELS BEFORE IRAN WAR.