WSJ - IMF Revises US 2014 Growth Outlook Down To 2.7%, Keeps 2013 At 1.9%Submitted by emalvini on Fri, 06/14/2013 - 15:59
WSJ - IMF Revises US 2014 Growth Outlook Down To 2.7%, Keeps 2013 At 1.9%
By Ian Talley
WASHINGTON--The International Monetary Fund lowered its 2014 growth outlook Friday and waded into the hot public debate over the Federal Reserve's monetary easing exit strategy by suggesting that the central bank should continue its large-scale bond buying program until at least the end of 2013.
Although the Fed's easing, meant to spur growth by flooding the market with cheap debt, risks creating new financial problems, the IMF said the benefits to the economy outweigh the costs. The IMF kept its forecast for a slight cooling of growth this year to 1.9%, from 2.2% last year, but cut its estimate for 2014 growth by 0.3 percentage points to 2.7%. Inflation, the fund said, is expected to remain relatively subdued over the next year.
Still, the IMF said that despite headwinds, the nature of the recovery appears to be changing as house prices and construction activity is rebounding, household balance sheets are strengthening and labor market conditions are improving.