VIENNA (Reuters):
THE FEDERAL Reserve may need to continue raising interest rates depending upon how economic conditions evolve in the United States, International Monetary Fund chief Rodrigo Rato said on Monday.
Generally he said the withdrawal of stimulative monetary conditions globally is a "healthy movement" especially given that inflationary risks are to the upside. But central banks need to time moves based upon conditions in their own regions.
"I back the idea that the U.S. monetary authorities have done a very important job in getting to a more neutral monetary policy regarding their own economy.
"Still some measures might be needed in the future, but that will depend very much on the data on the strength of the U.S. economy," Rato, the IMF managing director, said at a news conference.
Rato urged caution on the parts of the Bank of Japan and the European Central Bank, where recoveries are less well entrenched.
"In the case of Europe, there is a need for higher growth ... We see the need for monetary policy to be very aware in Europe (that it is still in) the first stages of the recovery," he said.
