The International Monetary Fund (IMF) called on the US authorities and the Federal Reserve System (Fed) to hurry with the tightening of monetary policy and the adoption of measures in the fight against price increases, writes CNBC.
The IMF responded to the decision of the Fed leadership led by Jerome Powell to begin the gradual folding of the quantitative mitigation program providing for the purchase of state and corporate bonds in order to reduce their profitability and providing additional liquidity of the banking system.
The regulator plans to reduce bond purchases by $ 15 billion every month – from $ 105 billion in November. But according to the IMF, this pace will be insufficient, especially against the background of identifying a new Omicron strain of coronavirus. In addition, the Fed is recommended to think about an increase in the base rate currently at the level of 0-0.25 percent per annum.
The increase in the money supply in the US economy due to the program of quantitative easing leads to inflation due to demand growth. According to the results of October, the consumer price index is a key inflation rate in the United States – reached 6.2 percent in annual terms, which has become the highest result in the last 30 years.