The IMF advises the Fed to maintain interest rates at their current level until at least the end of the year.

The International Monetary Fund advises the Federal Reserve to postpone cutting interest rates until at least the end of the year, as the U.S. is the only G20 economy to experience growth above pre-pandemic levels, and this "robust" growth poses ongoing inflation risks.

The IMF recognizes significant risks and recommends that the Fed maintain policy rates until at least late 2024. The Fed's current fed funds rate has been within the range of 5.25% to 5.50% since July 2023.

The IMF predicts that the core personal consumption expenditures price index, which is the Fed's preferred measure of inflation, will end 2024 at approximately 2.5% and reach the Fed's target rate of 2% by mid-2025, ahead of the Fed's own projection for 2026.

Georgieva stated that the U.S. economic strength during the Fed's rate-hike cycle was due to labor supply and productivity gains. However, she emphasized the need for "clear evidence" that inflation is decreasing to the 2% target before the Fed reduces interest rates.

The IMF's revised outlook for the downward inflation trend in the U.S. is influenced by signs of a slackening job market and declining consumer spending.

Georgieva stated that a lesson learned from the past few years is that we are currently facing more uncertainty, which also lies ahead. Despite this, we are confident that the Fed will navigate through it with the same prudence it has shown in the past year.

Correction: A previous version of this article misstated Kristalina Georgieva's name.