IMF Sees Soft Landing for U.S. Economy

The U.S. economy is likely to achieve a “soft landing” as growth eases to a slower but sustainable pace, the International Monetary Fund said late last week. The IMF also cautioned that there are growing signs of inflationary pressures, according to a story by Reuters.

In its annual review of the U.S. economy, the IMF said the Federal Reserve will need to tailor its policy to limit downside risks to economic activity — higher oil prices, cooling housing market and low savings — while ensuring that inflation expectations remain anchored.

“The recent pickup in core inflation and expectations, coupled with a further drop in the unemployment rate, suggests a risk of a build up in price pressures,” the fund said in a release.

Given those pressures, IMF staff noted that U.S policy-makers had appropriately cautioned that further policy firming may be needed to keep a lid on price rises.