IMF Economist Supports Fed's Upcoming Rate Cut Plan

According to Odaily, the International Monetary Fund's (IMF) Chief Economist, Gita Gopinath, has expressed support for the Federal Reserve's upcoming rate cut plan, aligning it with the IMF's recommendations. Gopinath stated, 'The message from Fed Chair Jerome Powell today is very consistent with our stance.' She noted that inflation has been improving and the labor market is showing signs of cooling. If the labor market no longer fuels inflationary pressures, there could be some easing in overall demand, allowing policy rates to return to a more neutral level. Gopinath emphasized that the United States should not become complacent in thinking that inflation has been fully addressed, pointing out that service sector prices are still rising. She stressed that the Federal Reserve must adjust the pace and extent of rate cuts based on upcoming economic data, as 'inflation still has some upside risks.' Despite strong economic growth, Gopinath observed that the U.S. job market is clearly cooling. She does not foresee an imminent recession in the U.S., noting that the likelihood of a soft landing has increased, which remains the IMF's primary forecast.