“The International Monetary Fund has yet to record enough banks cutting back on lending, and that could prompt the US Federal Reserve to reverse course with the rate hike cycle”. This was stated by the managing director of the IMF, Kristalina Georgieva, in an interview with CNBC, quoted by Reuters.
“The lack of a significant slowdown in lending, combined with robust US employment data released on Friday, could lead to further rate hikes”, she said.
“The pressure due to the increase in incomes and the unemployment rate, which continues to be at a very low level, means that the US Federal Reserve will have to stay the course and maybe, in our view, do something more,” said Kristalina Georgieva .
She predicts that the US unemployment rate will exceed 4 percent and reach 4.5 percent.
US job growth accelerated in May, but the jump in the unemployment rate to a seven-month high of 3.7 percent suggested that labor market conditions have eased.