The IMF predicts that the Federal Reserve has limited room to cut interest rates this year and maintains its growth expectations for the United States unchanged.

The International Monetary Fund (IMF) stated that although US inflation is expected to fall to the Federal Reserve's target of 2% in the first half of 2027, policymakers have almost no room to lower interest rates this year. According to the IMF's annual review of the US economy, known as Article IV consultations, conducted at its headquarters in Washington, the institution's staff expects the Federal Reserve to lower interest rates only once this year. "Overall, staff believe that there is limited room to lower policy rates over the next year," IMF staff said in a statement. "A more substantial monetary easing would require a significant deterioration in the labor market outlook, while inflation pressures cannot rise, including short-term inflation expectations driven by rising oil and commodity prices." In another statement, IMF Executive Directors said that given the Federal Reserve's current policy stance is close to neutral, "there is limited room for interest rate cuts in 2026, especially in the case of rising energy prices, which could transmit to core inflation, and the risk of further delays in inflation returning to target due to rising global commodity prices."