IMF’s warning to the FED

The American economy continues to recover after the halt suffered during the winter. Thus, industrial production grew in May while the Empire State Index recorded its highest level in the last four years.

However, not all are good news. The IMF decided to revise downwards both its growth forecasts for the US economy in 2014 (which went down from 2.8% to 2%), and in the long-term (which were set at levels close to 2%). Market watchers at Link Securities point that most investors ignored these forecasts, which usually change depending on the circumstances.

The IMF’s revision comes just before the FED’s meeting, in which the institution faces a growing debate over when to begin raising interest rates as the economy recovers. The central bank will also release a new round of quarterly forecasts, which are closely-watched for clues to the path of interest rates.

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