On January 5, recently, IMF Chief Economist Gopinath said that US inflation “has not improved yet”, and it is too early for the Federal Reserve to declare victory in the fight against inflation. She said that if you look at the data on the labor market and inflation in the service sector, I think it is obvious that inflation in the United States has not improved, so my suggestion to the Fed is to stick to raising interest rates this year.
Gopinath expressed support for the Fed raising its benchmark interest rate to around 5 percent and keeping it at that level throughout this year.
Gopinath expects the ECB‘s tightening cycle to be longer as Europe grapples with an energy crisis. We don’t expect inflation to start approaching the ECB’s 2% target until 2024, she said.
