IMF predicts US inflation to reach 2% target with delay

IMF Spokesperson Julie Kozack said on Thursday that US inflation will reach the target level of 2% by late 2027 due to oil risks, urging the Fed to exercise caution on policy steps.

Answering a question about the US economy, Kozack said economic activity in the country returned to a more moderate growth level of around 2%.

The US economy grew by 1.6% in the first quarter of the year, maintaining solid momentum despite the moderation, she noted.

Kozack stated that the slowdown in US employment growth reflected a decline in both labor supply and demand.

She explained that the reflection of high tariffs on inflation happened gradually.

The spokesperson also observed fresh pressure on headline inflation due to rising oil prices amid the Middle East war.

The IMF currently anticipates US inflation to return to the 2% target with a delay by the end of 2027, she said.