The International Monetary Fund talks about rebalancing the US economy

The International Monetary Fund said that the US Federal Reserve raised interest rates to restore price stability and achieve balance in the labor market, but what happened is that the supply of new jobs exceeds the number of workers available in the United States, as the unemployment rate fell to its lowest level in more than 50 years. year, which contributed to the rise in inflation.

“To help rebalance the economy, IMF analysis shows that staying on track and keeping interest rates high this year will curb inflation. Although these higher rates will temporarily increase unemployment, they will pave the way for stable inflation and growth,” he added. sustainable economy, which will ultimately help create more jobs in the future.”

The fund said that higher interest rates would dampen demand for workers and modestly increase unemployment. This would reduce the pressure for large wage and price increases, particularly in the services sector, which would help reduce inflation. (Arabic)