IMF Chief Economist Discusses U.S. Economy Insights

In an exclusive interview at Jackson Hole, IMF Chief Economist Pierre Olivier Ginz addressed concerns over the US economy's cooling trend following the July jobs report. He emphasized that while jobless claims and inflation risks have moderated, the US economy remains fundamentally strong. Ginz clarified that despite an increase in unemployment and a slowing labor market, these indicators arise from a robust economic footing. The Federal Reserve is projected to maintain an appropriate approach, eyeing rate cuts towards the end of the year as inflation inches closer to the target of 2.5% by year-end. Ginz anticipates that the pace of these decisions will depend on whether inflation surprises to the upside or downside. He also noted challenges in global financial markets stemming from differential interest rates as advanced economies begin rate cuts. Notably, concerns linger over persistent inflation pressures, particularly in services. It is anticipated that the IMF's upcoming global growth outlook will mirror the earlier projection of 3.2% for this year, amid calls for cautious monetary policy to address potential volatility across markets. Ginz concluded with an acknowledgment of rising risks associated with trade tariffs, urging moderation to safeguard global trade amidst escalating tensions. His overall perspective underscored a balancing act between ensuring price stability and avoiding an economic downturn.