IMF: Concluding Statement of the 2011 Article IV Mission to U.S.

IMF: Concluding Statement of the 2011 Article IV Mission to The United States of America, June 2011

  • “Policies must strike the right balance between exiting from extraordinary support and sustaining the recovery amid renewed headwinds. Fiscal policy consolidation needs to proceed as debt dynamics are unsustainable and losing fiscal credibility would be extremely damaging. However, the pace and composition of adjustment should be attuned to the cycle, within a politically-backed strategy that raises medium-term revenues and addresses longterm expenditure pressures. The deficit reduction proposed in the February budget could be too front-loaded given the cyclical weakness and, at the same time, insufficient to stabilize the debt by mid-decade. Current monetary policy accommodation, including through Fed asset holdings, will likely remain appropriate for quite some time, unless inflation prospects change significantly, in either direction. Timely and thorough financial reform implementation should continue.”
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