(Reuters) – The International Monetary Fund has yet to see enough banks pulling back on lending that would cause the U.S. Federal Reserve to alter course with its rate-hiking cycle, CNBC reported on Sunday, citing IMF’s Managing Director Kristalina Georgieva.
The lack of a significant slowdown in lending combined with a resilient U.S. jobs report on Friday could lead to further rate hikes, Georgieva told CNBC in an interview.
“The pressure that comes from incomes going up and unemployment being still very, very low, means that the Fed will have to stay the course and perhaps in our view, they may need to do a little bit more,” she told CNBC.
She projected the U.S. unemployment rate to go beyond 4%, to up to 4.5%.
The U.S. job growth accelerated in May, but a jump in the unemployment rate to a seven-month high of 3.7% suggested that labor market conditions were easing.
(Reporting by Lavanya Ahire in Bengaluru, Editing by Louise Heavens)
