The International Monetary Fund on Tuesday said there were “larger than usual” risks to the U.S. economy, given policy uncertainties. In its so-called Article IV consultation which it does with every member state, the IMF largely backed the Trump administration’s plans to reform individual and corporate taxes, although the IMF also recommended a consumption tax. The IMF did add that even with an “ideal constellation of pro-growth policies,” the Trump administration’s forecast that it would boost GDP by 1 percentage point is “unlikely.” The IMF said the U.S. dollar is moderately overvalued, by 10% to 20%, and said the Federal Reserve should continue to gradually increase interest rates and unwind the balance sheet. It projected GDP growth of 2.1% in 2017 and 2018, 1.9% growth in 2019 and 1.8% growth in 2020.
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