IMF says U.S. economic outlook is strong but deficit spending raises risks

The U.S. economic outlook is strong, but the tax-and-spend policies make the fiscal stimulus stronger than what has been since the Johnson administration, the International Monetary Fund said Thursday in a report on the U.S. economy. “The near-term outlook for the U.S. economy is one of strong growth and job creation,” the IMF said. The IMF identifies risks including higher public debt, a greater risk of an inflation surprise, 

international spillover risks, the risk of future recession and increased global imbalances. The IMF added the deficit spending “will leave few budget resources available to invest in a range of urgently needed supply-side reforms, including infrastructure spending, that would raise living standards.” The Fed will have to raise policy rates at a faster pace to achieve its dual mandate, the IMF added in what’s called its Article IV consultation, which it does with every member nation.

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