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6/4/15

US Economy: IMF downgrades outlook for U.S. economy, urges Fed to delay rate hike

The International Monetary Fund urged the Federal Reserve to wait until the first half of 2016 to start raising short-term interest rates because the U.S. economy remains subpar.

In its annual checkup of the U.S. economy released Thursday, the IMF said "the underpinnings for continued growth and job creation remain in place." But America's "momentum was sapped in recent months by a series of negative shocks," including a harsh winter and a strong dollar that hurts U.S. exports.

The IMF predicted the U.S. economy will grow 2.5 per cent this year, down from its April forecast of 3.1 per cent.

The agency said the Fed should wait for more signs of improvement -- specifically "greater signs of wage or price inflation." The central bank has kept its key benchmark rate at a record low near zero since December 2008.

Barring unexpected good news, the IMF said the Fed should probably hold off until next year.

Read more: IMF downgrades outlook for U.S. economy, urges Fed to delay rate hike | CTV News

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