IMF Managing Director warns of soaring long-term interest rates in Japan and the U.S. Interest rate hike is “appropriate”

[Washington Current Affairs] On the 7th, International Monetary Fund (IMF) Managing Director Georgieva gave a speech in Singapore ahead of next week's annual meeting of the IMF and World Bank in Bangkok, where she expressed caution about soaring long-term interest rates in countries such as Japan and the United States. On that basis, he evaluated the decision by central banks in Japan, the United States, and Europe to raise interest rates as "very appropriate."

Georgieva expressed a sense of crisis, saying that Japan's 10-year government bond yields have reached their highest levels in about 30 years and in the United States for the first time in about 19 years, and that they are "still rising." He emphasized that ``urgent and comprehensive policy responses are needed,'' noting that fiscal deterioration and expanding public debt are factors that will affect the global economy.

He analyzed that the impact on the world economy from soaring energy prices due to the deterioration of the situation in the Middle East is ``significant, but has stabilized.'' However, he pointed out that the artificial intelligence (AI)-related investment boom and rising resource prices are contributing to inflation. For each country, he said, ``now may be a good time to take a hawkish stance (active on monetary tightening), albeit with caution.''