IMF Supports Fed's Interest Rate Cut Amid U.S. Economic Uncertainty

The IMF supports the Federal Reserve's interest rate cut, citing high U.S. economic uncertainty and moderate inflation. The IMF also views the Bank of Japan's interest rate decision favorably and highlights the need for cautious monetary policies. It recognizes both opportunities and risks with crypto assets.

The International Monetary Fund (IMF) is backing the Federal Reserve's recent interest rate reduction and its cautious economic outlook, citing ongoing economic unpredictability in the United States. According to IMF spokesperson Julie Kozack, both the labor market and inflation trends justify the Fed's actions.

Kozack noted that the U.S. disinflation process has been less damaging to employment than anticipated. The IMF predicts that the Federal Reserve's preferred core PCE inflation measure will dip to just under 3% by the end of 2024. Meanwhile, the Bank of Japan maintained interest rates, awaiting clearer policy directions from U.S. President-elect Trump.

On the topic of Trump's strategic bitcoin reserve plan, Kozack withheld comments but mentioned the IMF's loan conditions with El Salvador, where bitcoin activities are being reduced. She highlighted the importance of handling crypto asset risks while acknowledging the expanding adoption of such technologies in financial sectors.

(With inputs from agencies.)