IMF warns of rising US recession risk and defends Fed rate policy

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The United States is facing the risk of decline, as Donald Trump’s trading war moves the global economy into a “significant slowdown”, the IMF has warned the best economist on interest rates.

In his last world’s economic perspective, the Foundation has reached its rise for the United States this year and lowered its prospects for all other G7, as well as large economies, India, Brazil and South Africa.

The foundation reports that countries must “urgently resolve” their trade tensions to avoid further damage to growth prospects. “If it is stable, this sharp increase in tariffs and clerk uncertainty will significantly slow down global growth.”

During this month, the shares have slipped in the United States and other major markets, as investors are encountered by a sharp increase in US obstructions and uncertainty about the next step in Trump.

Sales resumed on Monday, Bottle of Dollar on Fear That Trump Tighten To Remove US Federal Reserve Jayay Powell: From his position, the independence of Fed threatens the president’s immediate exchange rate cuts.

IMF Chief Economist Pierre-Olivier Guricas has said that the main forecast of the foundation was that the United States and the world economies would avoid this year, “strong momentum.” But the probability of a decline in the United States increased by about 40 percent, Guricchas said compared to 25 percent in its previous global economic perspective.

“The main risk of us is that there can be further escalation in tariffs and trade tensions,” he said. “There is also the risk of financial conditions much later than they have.”

Is Tariffs: It will also be addressed to higher inflation in the United States, according to the IMF, this year consumer prices will grow by 3%, and a higher interest rate was expected.

The Farewell Foundation’s argument that the central bank’s independence is important that inflation is checked, Guricchas said that the Fed behaves correctly to keep interest rates. The IMF prospects suggests that there will be two Fed Rate cuts this year.

He added that additional commercial obstacles submit a supply shock that can “materially” affect prices in the coming years.

“Fed is sitting at the moment and says:” Well, how will this be played? ” “And waiting and finding things it looks very appropriate.”

Outlook comes as World Economic Policy Developers in Washington, IMF / World Bank Spring Meetings, which are dominated by the discussion of global trade conflicts.

This year, the IMF has reduced its global growth worldview to 2.8 percent and reduce its forecast from 2026 to 3 percent. This is a slowdown in the interest rate of 2024, as the IMF warns the “main negative shock” to increase the barriers to trade.

The forecast included the statements of the US tariffs and other countries by other countries from February 1 to April 4, before Trump announced a 90-day pause on most of his so-called mutual tariffs. Only Turkey, Argentina and Russia have seen growth modernization only from the G20 countries.

The foundation has reduced the US growth forecast in 2025, in 2025, from the previous prediction of the previous year, and in 2026, in 2024, the fastest growing G7 economy.

“The worldview prevails to the strengthening of risks,” said the foundation. “Wider financial instability can occur, including the damage to the international monetary system.”

This year, growth in Germany is now expected to zero in 2026 with an extension, while the UK is set for 1.1% growth this year.

China is also being slowed down, and the IMF predicts 4% expanding this year, and next, compared to 5% of 2024.

Is Phase Alternatives outlined for its main “link” scenario for the world economy.

But before that, such an alternative contains a 90-day break for most of the so-called reciprocal tariffs in Trump, the fund concluded that even if the responsibilities were postponed indefinitely, it will “not change”.

This is due to the size of the United States and China, the two largest economies in the world.

The negative impact of obstacles will not be limited to almost terms, the foundation added. It expects tariffs to reduce competition and innovation in a longer term, while adding “further weighs the prospect.”

It added.