IMF: Fed should wait until late 2024 to consider rate cuts

July 19 (Bloomberg) -- The International Monetary Fund (IMF) said Thursday that the Federal Reserve should wait until “the end of 2024” to consider lowering interest rates, while the U.S. government needs to raise taxes to rein in the growing federal debt, with tax hikes targeting households earning less than $400,000 a year, according to a report by Caixin News Agency.

These recommendations come from the IMF's latest detailed staff report on its annual “Article IV” assessment of U.S. economic policy. In recent weeks, the IMF has been emphasizing the need for more prudent fiscal policy as deficits continue to grow despite strong growth in the U.S., and as Republicans and Democrats work on tax and spending proposals ahead of November's presidential election, the IMF has noted the need for more prudent fiscal policy until data show a sustainable pullback in inflation to the level of the Federal Open Market Committee (FOMC), given that data earlier this year showed significant upside risks to inflation. Open Market Committee (FOMC) set the 2% target after the reduction of policy rates would be prudent.

It is reported that the Fed has four more rate meetings this year, July 30-31, September 17-18, November 6-7 (after the U.S. election) and December 17-18, respectively.