International Monetary Fund Managing Director Christine Lagarde told the FOX Business Network that recent economic data suggests the Federal Reserve should delay a decision on raising interest rates until next year.
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“What we are seeing on the data, particularly on inflation, is that the pickup is very slow and we believe that there is a good argument to actually defer until early 2016 any rate hike,” Lagarde said in an exclusive interview with FOX Business Network’s Maria Bartiromo.
Lagarde’s comments to Bartiromo echo a recommendation included in an IMF report released Thursday that in addition to calling for a delay in a rate hike also lowered the IMF’s economic forecast for U.S. growth in 2015 from 3.1% to 2.5%.
The Fed seemed poised for a rate hike in the first half of 2015 until the economy contracted in the first quarter, as reported by the government last week. Now the Fed is taking a more dovish approach toward liftoff and a delay into 2016 is entirely plausible.
Lagarde also commented on the latest turmoil in Greece, where government officials are balking at implementing further fiscal reforms mandates as part of a massive bailout provided by European fiscal leaders.
“The whole purpose of the exercise is for Greece to return to economic growth and to a sustainable economic growth. And given the situation action is needed on various fronts – there has to be some fiscal adjustment and under the proposal to the Greek authorities that fiscal adjustment has been phased over a longer period of time,” Lagarde said.
You can watch the full interview on FOX Business Network's Mornings With Maria on Friday from 6am-8am ET. Find FOX Business Network using the channel finder.