Davos: IMF Chief says Fed to raise rates at midyear
Christine Lagarde: US must be economic driver of rest of the world, and raising interest rates will cause volatility
ANKARA
International Monetary Fund Managing Director Christine Lagarde said Thursday that the US Federal Reserve will raise interest rates in 2015, probably around the middle of this year.
Speaking on a round table on Quantitative Easing and stimulus measures at the World Economic Forum in Davos, Lagarde said that the US is growing, so raising rates is a good sign.
"U.S. employment is up, unemployment is down, and inflation is hopefully giving little signs of moving in the right direction,” Lagarde said.
"Fed governor Janet Yellen has done a terrific job of communicating with the market," she added.
"But the process won’t be painless. Raising US interest rates will unavoidably cause “side effects, spillovers and volatility.”
Quantitative Easing is "already effective."
Ahead of the European Central Bank's announcement about quantitative easing on Thursday, Lagarde said that the prospective ECB policy has "already been effective."
"Look at the markets, look at the expectation and you see that QE is already effective," Lagarde also said.
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