New inflation warning: Get used to high interest rates, IMF says

The International Monetary Fund warns that persistent inflation may lead to longer periods of higher interest rates, increasing global fiscal and financial risks. Escalating trade tensions and high prices for services are contributing to inflation. This caution on inflation explains why central banks have been hesitant to cut interest rates. The IMF predicts that major central banks will reduce borrowing costs in the second half of the year, with the Federal Reserve anticipated to make one cut by year-end. The IMF expects global inflation to slow to 5.9% this year and highlights rising trade tensions as a risk to inflation. The IMF forecasts 3.2% global economic growth this year, with downward revisions for US growth. India and China are projected to have higher growth rates in 2024, accounting for half of global expansion.