Fed can start cutting interest rates by end of 2024, IMF managing director says

The
Federal
Reserve
should
be
able
to
start
cutting
interest
rates
by
the
end
of
2024,
according
to
Kristalina
Georgieva,
managing
director
of
the
International
Monetary
Fund.

“We
remain
on
our
projection
that
we
would
see,
by
the
end
of
the
year,
the
Fed
being
in
a
position
to
take
some
action
in
a
direction
of
bringing
interest
rates
down,”
Georgieva
said
on
CNBC’s
“Squawk
on
the
Street.” “But
again,
don’t
hurry
until
the
data
tells
you
you
can
do
it.”

Georgieva’s
comments
come
after
recent
inflation
data
—
which
reflected
price
growth
well
above
the
2%
target
—
has
bolstered
concerns
that
the
central
bank
will
not
begin
lowering
rates
as
early
as
some
had
previously
hoped.
Fed
funds
futures
pricing
data
suggests
that
the
first
rate
cut
could
come
in
September,
according
to
the

CME
FedWatch
Tool.

Those
fears
have
contributed
to
a
recent
pullback
in
the
U.S.
stock
market,
with
the
benchmark


S&P
500
down
nearly
2%
since
the
start
of
April.

Thursday
data
showed
wholesale
prices

rose
0.2%
in
March,
slightly
under
the
estimate
of
economists
polled
by
Dow
Jones.
That
came
a
day
after
a
report
indicated

consumer
prices
climbed
more
than
economists
anticipated
and
marked
an
acceleration
for
inflation.

Georgieva
said
the
Fed
should
continue
following
economic
data,
which
will
signal
when
it’s
appropriate
to
begin
reducing
the
cost
of
borrowing
money.

People
should
be
optimistic
about
the
future
of
the
United
States
as
the
country
does
not
feel
as
much
upward
pressure
on
labor
costs
compared
with
other
places,
the
former
World
Bank
CEO
said.
And
the
U.S.
government
can
play
a
relatively
bigger
role
in
keeping
the
economy
from
overheating,
Georgieva
said,
which
is
another
reason
for
optimism
on
the
country’s
financial
health.

Still,
Georgieva
warned
that
keeping
interest
rates
elevated
for
longer
than
expected
can
create
risks
to
financial
stability
for
the
rest
of
the
world.
Meanwhile,
she
said
central
banks
around
the
world
will
be
less
likely
to
follow
the
direction
of
the
U.S.
Fed
as
conditions
diverge.

“Inflation
is
going
down,”
Georgieva
said. “But,
it
is
not
yet
where
we
want
it
to
be.”