US Fed should wait until 2016 to raise rates, IMF says

The US Federal Reserve should wait until next year to raise interest rates the world’s financial watch-dog said.

“The FOMC should defer its first increase in policy rates until there are greater signs of wage or price inflation than are currently evident,” the Washington-based IMF said in its annual Article IV consultation report with the country.

On the basis of its own forecasts the US should wait until the first half of 2016 to raise the Fed funds rate.

“A credible and detailed medium-term consolidation plan is needed to address rising health and social security costs and to improve the tax system. Such a plan would provide near-term fiscal space to finance supply-side measures that support future growth,” the IMF added.