Us Should Cut Rates In Late 2024

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Us Should Cut Rates In Late 2024

Imf Says Us Should Only Cut Rates In Late 2024

According to the IMF (International Monetary Fund), the US Federal Reserve should wait until late 2024 to start the rate-cutting cycle. IMF also stressed the need for the US government to raise taxes in order to reduce the federal debt.

According to the international bank, the tax should also be raised on the households which earn less than $400K per year.

Taxes Should Be Raised

The information was included in a detailed staff report prepared by the IMF in which an in-depth analysis of US economic policies was provided.

IMF chief commented on how the IMF can afford to wait a little longer before starting the easing cycle as the labor market is still very strong. The report also included key terms such as 'late 2024', which means the rate cut should start from December or somewhere around that.

They added that it would not be wise to start the rate-cutting cycle at this stage as the inflation is still moving towards the 2% goal.

Besides discussing the monetary policy, the IMF has also stressed the need to raise the taxes on US households and businesses. According to them, the public debt to GDP ratio in the USA will reach around 109.5% in the year 2029. In the year 2020, the levels were around 98.7%.

They commented on how such a high debt and deficit pose major risks to the US and even the global economy as a whole. To solve it, the US government will have to raise the tax rates on even the households earning below $400K.

The current US president has plans to raise taxes on wealthy corporations and Americans. However, he has no plans to raise the taxes on households earning less than $400K.

If we look at the Federal Reserve, they also have no plans to start the rate-cutting cycle anytime soon. At best, the first rate cut might come in September or even in December, similar to what the IMF has proposed.

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