During an interview aired on Thursday’s broadcast of CNBC’s “Squawk on the Street,” IMF Managing Director Kristalina Georgieva stated that the “stickiness of core inflation is going to go through this year,” and “hopefully, we will see it melting away next year.”
Georgieva said, “What we see is what we should expect to see, that the determined action of the Fed is going to pay off, and even more importantly, it has been a synchronized action of central banks all over the world that has given us this trajectory in the right direction, inflation going down. But core inflation is still high, and it is sticky, so the Fed will have to persist in pushing it down. Why do we need that? Because without price stability, we don’t have a sound foundation for growth.”
She added that while she won’t make any projections on how many rate hikes the Fed will make, “What I can say is that the Fed will continue to be guided by data, and as long as core inflation is not in the territory it has to be, the Fed will have to persist. What we expect is that the — this stickiness of core inflation is going to go through this year, hopefully, we will see it melting away next year.”
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