Acting IMF Chief: U.S. Slowdown Likely Temporary, More Fed Action Not Necessary

The interim Managing Director of the International Monetary Fund (IMF) said in an interview Wednesday that any U.S. slowdown is likely only temporary, and more Federal Reserve action is not necessary. Speaking with Reuters today, acting IMF chief John Lipsky did concede that developed economies must hold accommodative monetary policies in light of another possible growth slowdown and high unemployment. Regarding the Federal Reserve, it appeared that the IMF doesn't expect further action in the near future. "Our expectation is current U.S. monetary policy is consistent with a return to moderate growth," he noted, when asked if the Fed needed to consider further quantitative easing. According to the Reuters report, "Federal Reserve Chairman Ben Bernanke on Tuesday acknowledged the U.S. economy had slowed but offered no hint of additional stimulus. If the current lull in the economy is more prolonged, that could put the Fed in a bind as it has exhausted many of its policy options. The Fed has already slashed overnight interest rates to near zero and bought more than $2 trillion in government bonds, a policy known as quantitative easing, to pull the economy from a deep recession and spur a recovery." Lipsky is temporarily holding the IMF managing director job after former head Dominique Strauss-Kahn resigned in May amid allegations of sexual assault. He is currently under house arrest in New York City.