October 3, 2023

Taylor Daily Press

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IMF warning shot: ‘There is still room for rate hikes’

IMF warning shot: ‘There is still room for rate hikes’

The Director of the International Monetary Fund, Kristalina Georgieva, believes that the number of loans granted by financial institutions has not yet decreased sufficiently.

Why is this important?

For more than a year, central banks have been fighting inflation by raising interest rates. This is the most restrictive policy since the 1980s, when key interest rates rose to 5 percent in the United States and between 3.25 and 4 percent in Europe. While everyone expects the US Federal Reserve (Fed), unlike the European Central Bank, to hit the pause button. But the IMF threw a spanner in the works.

In the news: Gives Kristalina Georgieva CNBC An update on the interest rate situation.

  • According to the IMF chief, it is not yet time for the Fed to change course: “We are not yet seeing a significant slowdown in lending. There is some slowdown, but not of a magnitude that would make the Fed take a step back. It does.”
  • However, the decline in lending is a reality in the US and the banking crisis in March affected credit conditions

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