Kristalina Georgieva, the chief of the International Monetary Fund (IMF) cautioned the US about the keen global scrutiny of interest rates and industrial strategies, highlighting potential ramifications from the world’s largest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva remarked in an interview on Bloomberg’s Surveillance on Thursday.
“The two biggest issues,” she noted, “are what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The continued robustness of the US dollar is “concerning” for other currencies, particularly due to the uncertainty regarding its duration.
“That’s what I hear from countries,” stated the leader of the fund, which encompasses about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva expressed optimism that conditions will align for the Federal Reserve to commence rate cuts this year.
“The Fed is not yet prepared, and rightly so, to cut,” she affirmed. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
