Washington, June 25 (SocialNews.XYZ) The International Monetary Fund (IMF) on Thursday said the US economy continues to show solid momentum despite inflation remaining above the Federal Reserve's target, backing the central bank's decision to leave interest rates unchanged while cautioning that future policy moves should depend on incoming economic data.
Speaking at a regular IMF press briefing, Julie Kozack, Director of the IMF's Communications Department, said recent economic indicators pointed to continued resilience in the world's largest economy.
"Growth momentum in the US economy has been solid," Kozack said.
She noted that revised figures released showed stronger-than-expected economic growth during the first quarter of 2026.
"The first quarter growth numbers... were stronger than the preliminary estimate. I think they were 2.1% for the first quarter," she said.
According to Kozack, government spending rebounded after the federal government shutdown in late 2025, while business investment also remained robust.
"We saw government consumption bounce back in the first quarter of 2026 following the government shutdown in late 2025. We also see strong investment in the US, and that investment is also leading to strong imports of capital," she said.
She also highlighted labour productivity as a key strength of the US economy.
"Labour productivity continues to be very strong in the US, and that's an important distinguishing factor for the US, because in many parts of the world we've seen weak productivity growth, and the US, in that sense, is a bit of an outlier globally," Kozack said.
Responding to questions on monetary policy following last week's Federal Reserve meeting, Kozack said inflation remained above the central bank's objective but was expected to ease over time.
"We do see inflation is still above target, even though we do expect it to come down to reach the 2% target by the end of 2027," she said.
"Because of this dynamic, we think the Fed appropriately decided to keep the policy rate on hold."
Kozack said any future adjustments to interest rates should be guided by economic data rather than predetermined timelines.
"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," she said.
She also welcomed the approach of Federal Reserve Chair Kevin Walsh.
"We welcome Chairman's strong commitment to lead the FOMC in delivering price stability, something that he strongly emphasised," Kozack said.
The Federal Reserve kept its benchmark interest rate unchanged at its latest policy meeting, citing persistent inflation pressures despite continued economic expansion. Policymakers have signalled that future decisions will depend on the evolution of inflation, employment and broader economic conditions.
The IMF has consistently described the US economy as a key driver of global growth because of its size and influence on international financial markets. Decisions by the Federal Reserve are closely watched worldwide as they affect global capital flows, borrowing costs, exchange rates and investment across both advanced and emerging economies.
Source: IANS
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