IMF’s Georgieva: Seeing risk of more sustained rise in US inflation

In a blog post published on the International Monetary Fund (IMF)'s website, IMF Managing Director Kristalina Georgieva noted that they see a risk of a more sustained rise in US inflation or inflation expectations. Georgieva further added that this situation could require a sooner-than-expected tightening of the monetary policy in the US.

Additional takeaways

"It is essential that the US, other countries with accelerating recoveries avoid overreacting to transitory inflation increases."

"Higher US interest rates could lead to a sharp tightening of global financial conditions, significant capital outflows from emerging economies."

"Calling for urgent action by G20 to increase access to COVID-19 vaccines; more than 500,000 lives could be saved in the next 6 months."

"Monetary policy should remain accommodative in most economies, tighten where inflationary pressures high and expectations not firmly anchored."

"Exploring vaccine window under emergency financing facilities to support countries funding vaccinations."

Market reaction

These remarks don't seem to be having a significant impact on the USD's performance against its rivals. As of writing, the US Dollar Index was flat on the day at 92.54.