IMF raised US growth forecast for this year sharply higher from 4.6% to 7.0%. 2022 GDP growth forecast was also upgraded from 3.5% to 4.9%. Managing Director Kristalina Georgieva said the two fiscal stimulus packages will “add to near-term demand” and raises GDP by a cumulative 5.25% over 2022 to 2024.
IMF also said Fed would probably need to start raising interest rates in late 2022 or early 2023. Tapering could start in the first half of 2022. “Managing this transition — from providing reassurance that monetary policy will continue to deliver powerful support to the economy to preparing for an eventual scaling back of asset purchases and a withdrawal of monetary accommodation — will require deft communications under a potentially tight timeline,” IMF said.