## Managing Director's Opening Remarks at the United States 2022 Article IV Press Conference

_IMF News, June 24, 2022_

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## Bibliographic details
- Published: June 24, 2022

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### Overview and main messages
- Date: June 24, 2022
- The U.S. economy has staged a strong recovery from the COVID-19 shock supported by unprecedented fiscal and monetary support.
- Unemployment rate has returned to end-2019 levels.
- Output is close to its pre-pandemic trend.
- Poverty has fallen.
- 8½ million jobs have been created since end-2020.
- The recovery has supported the rebound in the global economy.

### Inflation and monetary policy assessment
- There has been a significant acceleration in wage and price inflation; pressures are broad based and go well beyond increases in energy and food prices.
- Tackling inflation is a top priority of the administration; discussions with Secretary Yellen and Chair Powell confirmed strong commitment to bring inflation back down.
- Responsibility to restore low and stable inflation rests with the Federal Reserve, which has a strong track record.
- As inflation proved more persistent since the last Article IV consultation, the Federal Reserve signaled intent to pursue a much tighter policy stance and reiterated and deepened this guidance at the June FOMC meeting.
- The IMF supports the path for the policy rate signaled by the Fed: to quickly get the federal funds rate to 3½ to 4 percent.
- The IMF expects this policy path should create an up-front tightening of financial conditions which will quickly bring inflation back to target.
- The IMF supports the Fed’s decision to reduce its balance sheet.
- The Fed is expected to remain data dependent and to telegraph clearly where policy is likely to go; this is important for both the U.S. and the global economy.

### Growth outlook and risks
- Based on the policy path outlined at the June FOMC meeting, and an expected reduction in the fiscal deficit, the IMF expects the U.S. economy will slow.
- The IMF notes a narrowing path to avoiding a recession in the U.S.
- Important shocks continue to buffett the economy, including the Russian invasion of Ukraine and lockdowns in China.
- Further negative shocks would inevitably make the situation more difficult.

### Fiscal policy stance and recommendations
- The IMF has been strongly supportive of the administration’s “Build Back Better” agenda.
- The IMF’s view: the policy package would help reshape the U.S. economy, release supply-side constraints, improve the safety net, support labor force participation, and incentivize investment and innovation.
- The failure of the package to secure broader legislative support is a missed opportunity.
- Recommendation: the administration should continue making the case for changes to tax, spending, and immigration policy to help create jobs, increase supply, and support the poor.

### Climate transition and related policies
- The administration’s goals include policies to facilitate a smooth, speedy transition to a low carbon economy; the IMF hopes relevant legislation can be approved quickly.
- In an international context, the IMF has made the case for an international carbon price floor to jump-start emissions reductions.
- The IMF supports other strategies including:
  - sectoral feebates,
  - regulatory restraints on emissions,
  - the elimination of subsidies for fossil fuels and carbon-intensive agriculture,
  - reprioritization of public spending toward mitigation and adaptation goals.
- Recommendation: prioritize policies that help ensure workers and communities benefit from the transition so it improves living standards broadly.

### Trade
- U.S. authorities underlined commitment to an open, transparent, and rules-based system of international trade.
- Given high inflation and strained supply chains, the IMF sees clear benefits in rolling back the tariffs introduced over the last five years.
- There is scope for the U.S. to work with trading partners to address longstanding concerns and distortions in the global trading system.

*Source: Managing Director's Opening Remarks at the United States 2022 Article IV Press Conference, June 24, 2022, IMF Communications Department*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [United States and the IMF](http://www.imf.org/external/country/USA/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [concluding statement](https://www.imf.org/en/News/Articles/2022/06/24/mcs062422-united-states-of-america-concluding-statement-of-the-2022-article-iv-mission)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/06/24/sp062422-us-a4-opening-remarks_