IMF warns US of early interest rate increase

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The International Monetary Fund (the IMF) has warned of a potential risk of growing economic threats to the US, with share prices hitting unsustainable levels after conducting a health check on the largest global economy.
This comes after experts had calculated a rise in September, although recent employment data and economic figures have lowered expectations. A further rate increase could create a rise in the value of the dollar, something that would potentially impede the growth of smaller more emerging markets.

The dollar has risen by 20% against a range of different currencies during the past 12 months. This week, the IMF commented that growth of these currencies could be debilitated by another rise in the dollar. Unless there was a dramatic change in circumstances financially, the organisation urged keeping rates at the present 0.25% into at least the first quarter of 2016 with a steady rise in federal funds thereafter.

Other jurisdictions like China could weaken global growth, and would reduce US exports and investment in certain sectors, the report stated adding: ‘Finally, economic threats from Russia/Ukraine or Greece represent unpredictable, difficult to quantify effects for America.’