IMF: Fed in position to cut interest rates this year

International Monetary Fund (IMF) Spokesperson Julie Kozack said that they continue to predict that the US Federal Reserve (Fed) will be in a position to reduce interest rates later this year. Kozack made assessments regarding developments in the global economy at the press conference she held. In the meeting where questions were asked about the US economy, Kozack stated that the performance of the country's economy was quite strong, economic activity and employment exceeded expectations, and the disinflation process continued. Kozack said, "We support the Fed's data-based and cautious monetary policy approach. We also expect the Fed to be in a position to reduce interest rates later this year, and this assessment remains valid." Kozack also emphasized that the US should take action to reduce its high budget deficit and put its debts on a downward trend, and explained that they have been expressing these concerns for a long time. Kozack, drawing attention to the fact that the country has a very high budget deficit, stated that action must be taken to put the debt-to-GDP ratio on a steady decline, especially when the economy is strong, and that this will require a wide range of fiscal measures. Kozack, reporting that the net interest payments of the federal government in the US in fiscal year 2023 were 2.4 percent of GDP, noted that this rate is expected to rise to 3.2 percent in the current fiscal year and that this is largely due to high interest rates. Kozack pointed out that net interest payments are expected to remain high even in the medium term, and that they therefore call on the US to take action to reduce its budget deficit and debt.