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IMF urges vigilance against rate spike as Biden stimulus juices U.S. growth

Published 03/11/2021, 10:55 AM
Updated 03/11/2021, 11:00 AM
© Reuters. FILE PHOTO: The IMF logo is seen outside the headquarters building in Washington

WASHINGTON (Reuters) - The International Monetary Fund on Thursday warned central banks to be vigilant against a sudden spike in interest rates and tighter financial conditions that could spill over into emerging markets, even as a $1.9 trillion U.S. stimulus package will benefit most countries.

IMF spokesman Gerry Rice told a regular news briefing that the Fund's preliminary forecasts show the American Rescue Plan Act passed on Wednesday would boost U.S. GDP output by 5% to 6% over three years, but more analysis is needed to reach a final estimate. But exceptionally low dollar funding costs mean there is a risk of a sudden tightening of financial conditions, and this "should be carefully managed," Rice added.

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