IMF chief warns of U.S. inflation risk

Fund sees response spurring outflows

The International Monetary Fund on Wednesday said further fiscal support in the United States could fuel inflationary pressures and warned that the risk of a sustained rise in prices could require raising interest rates earlier-than-expected. Higher U.S. interest rates could lead to a sharp tightening of global financial conditions and significant capital outflows from emerging and developing economies, IMF MD Kristalina Georgieva said in a blog published Wednesday. The IMF’s assessment of U.S. inflation risks comes amid sharp criticism by Republican lawmakers of President Joe Biden’s multi-trillion-dollar plans to boost spending on infrastructure, child care, community college tuition and expanded coverage of home care for the elderly and disabled.