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IMF flags mounting strain in US economy as government shutdown drags on
The IMF warns of US growth weakness and data gaps post-shutdown, complicating Fed policy and raising global risk concerns.
The International Monetary Fund (IMF) warned that the US economy is under growing strain, projecting fourth-quarter growth to slip below its earlier 1.9 % forecast. Domestic demand is moderating, job growth is slowing and the recent 43-day federal government shutdown disrupted data collection and policy clarity.
The IMF’s caution raises questions for the Federal Reserve, which may delay rate cuts given the lack of reliable data and recession risks. The global capital markets will be watching any signals of US weakness for spill-over into emerging markets.