IMF says US economy shows solid growth, inflation to hit 2% by 2027

Investing.com -- The International Monetary Fund said Thursday that the United States economy has maintained solid growth momentum and projected inflation would reach the Federal Reserve's 2% target by the end of 2027.

IMF spokeswoman Julie Kozack addressed reporters at a regular news briefing, commenting on the Fed's recent decision to maintain its key policy interest rate. She praised the commitment of new Fed chair Kevin Warsh to achieving price stability.

"Growth momentum in the U.S. economy has been solid," Kozack said, pointing to Thursday's data showing first-quarter GDP growth was revised upward to a 2.1% annualized rate from the previously reported 1.6% rate.

Kozack noted that government consumption had recovered, investment remained strong, and labor productivity stayed high. She described the US as an outlier compared to other global economies.

While inflation continues to run above the Fed's target, the IMF expects it to decline over time.

"Because of this dynamic, we think the Fed appropriately decided to keep the policy rate on hold. Any further policy actions by the Fed will need to proceed with caution and they would need to be carefully calibrated to the incoming data," Kozack said.

The Fed held its policy rate steady last week in the first rate decision under Warsh's leadership.

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