The economic challenge of the US: the IMF advises fiscal prudence in the face of growing deficits.

The International Monetary Fund (IMF) has issued a series of recommendations for the United States economy in its annual "Article IV" report, emphasizing the need for greater fiscal prudence in light of the country's continued deficits. One of the most prominent suggestions is that the Federal Reserve should not lower interest rates until the end of 2024, and it has also been noted the importance of increasing taxes to curb the growing federal debt, especially among households with incomes below $400,000 per year. In a scenario where US deficits continue to rise despite solid economic growth, the IMF emphasizes the need to take concrete measures to address this situation before the November presidential elections. The IMF's warning comes at a crucial moment, as both Republicans and Democrats are formulating fiscal and spending proposals that will have a significant impact on the country's economy in the coming years. The IMF's chief economist, Pierre-Olivier Gourinchas, has pointed out that the Fed could afford to wait longer before adjusting its monetary policy due to the strength of the labor market. However, the IMF's technical report states that any changes in interest rates should be postponed until the end of 2024 to avoid potential upside surprises in inflation data, which could have a negative impact on the economy. The main argument behind these recommendations is the need to address the potential risks of uncontrolled inflation, which have become more evident in recent economic data. In this regard, the IMF considers it prudent to wait for solid evidence that inflation is sustainably returning to the 2% target before considering any changes in monetary policy, such as lowering interest rates. These IMF recommendations pose a significant challenge for US authorities, as they imply the need to take unpopular measures, such as raising taxes, at a time when the economy is recovering from the impacts of the COVID-19 pandemic. However, the IMF believes that these measures are necessary to ensure long-term economic stability and avoid potential financial crises in the future. In summary, the IMF report highlights the importance of greater fiscal prudence and not rushing to adjust monetary policy in the United States. These recommendations underscore the economic challenges facing the country amid a global environment of uncertainty and emphasize the need to make strategic decisions to ensure sustainable and balanced growth in the coming years.