IMF chief says there's no significant slowdown in lending and the Fed may need to do more
The International Monetary Fund has yet to see enough banks pulling back on lending that would cause the U.S. Federal Reserve to change course with its rate-hiking cycle.
«We don't yet see a significant slowdown in lending. There is some, but not on the scale that would lead to the Fed stepping back,» the IMF's Managing Director Kristalina Georgieva told CNBC's Karen Tso Saturday in Dubrovnik, Croatia.
The Federal Reserve in a May banks report warned that lenders are worried about conditions ahead, as trouble in mid-sized financial institutions in the U.S. caused banks to tighten lending standards for households and businesses.
The Fed's loan officers added that they expect the issues to continue over the next year due to lowered growth forecasts and concerns over deposit outflows and reduced tolerance for risk.
Georgieva told CNBC: «I cannot stress enough that we are in an exceptionally uncertain environment. Therefore pay attention to trends and be agile, adjusting — should the trends change.»
The IMF's commentary on the pace of a slowdown in global lending comes after its Chief Economist Pierre-Olivier Gourinchas told CNBC in April that banks are now situated in a «more precarious situation» that would pose a risk to the international organization's world growth forecast of 2.8% for this year.
A majority of major global central banks, including the U.S. Federal Reserve, have tightened their monetary policy aggressively to tame soaring inflation. Meanwhile, the world's global debt has swelled to a near-record high of $305 trillion, according to the Institute of International Finance. The IIF said in its May report that high debt levels and interest rates have led to further concerns about leverage in the financial
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